Our books of the year

The Olympics: the West v China

How infectious is Omicron?
A special report on Japan
DECEMBER 11TH–17TH 2021

What would America fight for?

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 Contents The Economist December 11th 2021 7

The world this week United States

10 A summary of political 23 The defence budget
and business news 24 Trump’s media spac
Leaders 25 Religious schools
13 America 25 Let it snow
What would it fight for? 28 Sunset clauses
14 The Federal Reserve 29 Housing vouchers
Money printer 30 Lexington Arguing about
14 Adaptation statues
Japanese lessons
15 China and America The Americas
Asymmetric decoupling 31 Lithium in Bolivia
16 Electric cars 34 Bello Colombia’s election
On the cover Plugging the gap
If the United States pulls back,
the world will become more Letters
dangerous: leader, page 13. 18 On the size of
America is lukewarm about government, nuclear
preserving the liberal order it power, chess,
built after the second world Asia
Afghanistan, past tenses
war: briefing, page 19. 35 South-East Asia’s meth
Congressional funding and Briefing 36 Rohingyas v Facebook
military priorities, page 23. Joe 37 Life in North Korea
19 American foreign policy
Biden upbraids Vladimir Putin.
Eighty years after Pearl 37 India’s armed forces
But can he stop another
Harbour 38 Banyan After Aung San
Russian invasion? Page 49
Suu Kyi
Special report:
Our books of the year They are
Japan
about God, opioids, China and China
cannibalism, page 76. Books by The new era
39 Military bases abroad
our writers, page 79 After page 42
40 Macau’s gambling woes
The Olympics The winter games 42 Chaguan An Olympic rift
in Beijing may hasten a rift with the West
between China and the West:
Chaguan, page 42

How infectious is Omicron? Middle East & Africa

Early data show surging cases 43 Citizenship in the Gulf
but milder disease: graphic
44 Islamist infighting
detail, page 81
45 Broken promises in Congo
A special report on Japan The 46 Africans and global
country is not an outlier—it is a Bartleby The Elizabeth governance
harbinger: leader, page 14. Japan Holmes saga holds
offers the world examples to lessons for decision-
follow as well as ones not to, makers of all kinds,
argues Noah Sneider, after page 58
page 42. Why the global
demographic transition is
speeding up: Free exchange,
page 71

→ The digital element of your

subscription means that you
can search our archive, read
all of our daily journalism and
listen to audio versions of our
stories. Visit economist.com
Contents continues overleaf

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 8 Contents The Economist December 11th 2021

Europe Finance & economics

47 Meet Chancellor Scholz 63 The great resignation
48 Valérie Pécresse 64 Policing remote work
49 Biden, Putin and Ukraine 65 Is China easing?
49 Polder culture 65 The ecb and inflation
50 Charlemagne The 68 The economics of trains
invisible European 68 Nominal gdp in America
69 Buttonwood Top dollar
Britain
70 Crypto lobbying
51 No 10: scandal and stasis
71 Free exchange The
52 Uber loses in court—again demographic transition
53 Bagehot Britain’s
suburban future Science & technology
72 Mouse lemurs v mice
74 High-tech chickpeas
International 74 Liquid-metal machines
54 Car wars 75 What architects can learn
from bull-running

Books & arts

76 Our books of the year
79 Books by our writers
Business
56 ev-charging
58 Bartleby Lessons from
Theranos
59 Chinese listings Economic & financial indicators
59 Traumas of digital therapy 80 Statistics on 42 economies
60 German food delivery
62 Schumpeter Big business Graphic detail
v big labour 81 How infectious is Omicron?

Obituary
82 Bob Dole, a study in determination

Volume 441 Number 9275

Published since September 1843 Subscription service
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 10
The world this week Politics The Economist December 11th 2021

troops to defend Ukraine, but term for corruption. American

may offer more cash, arms and authorities say more than $1bn Coronavirus data
training. Mr Putin has hinted has passed through Mr Najib’s To 6am GMT December 9th 2021

that he thinks Ukraine should bank accounts. Mr Najib, who

Weekly confirmed cases by area, m
be part of Russia. still hopes to return to main­
3
stream politics, can make one Asia Western
Pedro Castillo, the new left­ more appeal in Malaysia’s United States Europe
2
wing president of Peru, avoid­ federal court.
Other
ed impeachment, after 1
Congress voted against a Western officials sounded
motion to proceed. Mr pessimistic as talks over the 0
Castillo’s supporters, of whom future of the nuclear deal 2020 2021
Olaf Scholz was sworn in as there are a diminishing num­ signed between Iran and six
chancellor of Germany, end­ ber in the country, called the world powers resumed in Estimated global excess deaths, m
ing the 16­year tenure of Ange­ impeachment proposal a Vienna. America accused Iran With 95% confidence interval
11.1 17.9 20.8
la Merkel. Mr Scholz, a Social right­wing coup attempt. of reneging on compromises it
Democrat, leads a three­party Protesters, both for and against had agreed to in previous
5.3m official covid-19 deaths
coalition, Germany’s first since Mr Castillo, took to the streets. rounds of talks. Iran has accel­
the 1950s, which includes the erated its nuclear programme Vaccine doses given per 100 people
Greens and the pro­enterprise Chile became the latest coun­ in violation of the deal. By country-income group
Free Democrats. The parties try in Latin America to legalise Low income 9
have approved a detailed plan gay marriage. This came two Houthi rebels in Yemen Lower-middle 74
for governing, which includes weeks before a presidential attacked Saudi Arabia with Upper-middle 144
a higher minimum wage and election, in which one of the several missiles and 25 armed High income 154
building more homes. First, front­runners has argued that drones. The Saudi­led co­ Sources: Johns Hopkins University CSSE;
however, they must contend “society works best with alition fighting the Houthis Our World in Data; UN; World Bank;
The Economist’s excess-deaths model
with a fourth wave of covid­19. heterosexual couples”. responded by bombing the
Yemeni capital, Sana’a, and
Austria’s chancellor, Alex­ A military court in Myanmar other cities. Fighting has in­ → For our latest coverage
ander Schallenberg, resigned found Aung San Suu Kyi guilty tensified, despite internation­ please visit economist.com/
after less than two months in of violating covid restrictions al efforts to broker a ceasefire. coronavirus
the job. The new chancellor, (she held a campaign rally) and
Karl Nehammer, now has the disturbing public order (her The United Arab Emirates is
job of enforcing a contro­ party’s Facebook page objected to cut the public­sector work governments to tell their
versial vaccine mandate that to the military coup against week to four and a half days citizens to leave the country.
covers all Austrians. her in February). For these and move the weekend to
ridiculous charges, she faces Saturday­Sunday. It will thus America decided not to send
two years in prison. For others become the only Gulf state not its officials to the Winter
Look back in anger yet to be heard, she faces a life to have a Friday­Saturday Olympics in Beijing in Febru­
Pandemic restrictions were behind bars. Her party won weekend, aligning its economy ary 2022, citing “egregious”
tightened in England as Om­ election by a landslide in 2020, with non­Arab markets. human­rights abuses in
icron infections surged. The but is now largely in hiding. Xinjiang. (American athletes
government advised people to Seven un peacekeepers were will still compete.) Some
work from home and ordered Rohingya refugees filed a killed when a bomb struck other countries, including
them to wear masks in more class­action lawsuit against their convoy in central Mali; Australia, Britain and Canada,
circumstances. Proof of vacci­ Facebook’s parent company, over 230 blue helmets have announced that their officials
nation or a negative covid test Meta, in the United States. been killed in Mali since 2013. would also stay away.
will be required to enter large They are seeking $150bn in
venues. Meanwhile, the gov­ compensation, alleging that Adama Barrow was elected to a
ernment struggled to explain the company did not do second term as president of Happy new year
why staffers held a party at 10 enough to stop others from the Gambia in the first vote in Bill de Blasio, who will soon
Downing Street in December using its platform to incite decades that was not domin­ leave office as mayor of New
2020, when the rules stopped violence against Rohingyas in ated by Yahya Jammeh, the York, introduced a vaccine
ordinary folk from meeting up. Myanmar, where they have former coup­leader who ruled mandate for the private sector
been so brutally persecuted from 1994 until his defeat at that will come into force on
Joe Biden and Vladimir Putin that hundreds of thousands the polls by Mr Barrow in 2016. December 27th. The mandate
held a two­hour video confer­ have fled. If successful, the suit is stricter than the federal
ence to discuss a huge build­ would be unprecedented. Ethiopia said government government’s, which is due to
up of Russian troops on the forces recaptured Dessie and begin on January 4th. It
border with Ukraine. Mr Biden Bipin Rawat, India’s chief of Kombolcha, two strategic applies to all businesses,
vowed to impose robust eco­ defence staff, was killed in a towns north of the capital, rather than just firms with 100
nomic sanctions if Russia were helicopter crash. Foul play is Addis Ababa. The fall of the employees or more. Even tiny
to invade Ukraine again. not suspected. towns to rebels from the corner stores will have to
These might include blocking northern region of Tigray in exclude unvaccinated
Russia’s Nord Stream 2 gas Najib Razak, Malaysia’s for­ October had sparked fears that customers. For shoppers,
pipeline. Mr Biden is highly mer prime minister, lost an the capital itself might fall and proof of a negative covid test
unlikely to send American appeal against a 12­year jail prompted several Western will be no substitute.

012
 The world this week Business The Economist December 11th 2021 11

The share prices of some of down. Russian media spec­ Uber’s business in London lacks data) said that conges­
China’s leading tech compa­ ulated that his replacement took another knock when the tion in London was almost
nies fell sharply following the might be a senior executive at High Court ruled that it cannot back to pre­pandemic levels,
news that Didi Global would the state telecoms group, who act as the agent between the even though trips to central
delist from the New York Stock is also the son of Vladimir passenger and driver, meaning London were still down on
Exchange, about six months Putin’s deputy chief of staff. Uber, and not the driver, is those of 2019. In New York the
after its initial public offering liable for any mishaps affect­ overall number of hours lost to
there. Didi’s flotation, the Faced with an annual inflation ing car journeys. Uber had traffic delays was 27% below
biggest by a Chinese firm in rate running close to 11%, sought a clarification of the those of 2019 and in Los Ange­
America since Alibaba’s in Brazil’s central bank raised its law after the British Supreme les, 40%. In Paris it was 15%.
2014, angered the Chinese benchmark interest rate for the Court decided in February that
government, which started an seventh time in 2021, by a hefty its drivers are workers, not At a gathering of global oil
investigation of the ride­ 1.5 percentage points to 9.25%, contractors. This week’s ruling executives in Houston, the
hailing company’s practices and indicated there will be will apply to all private­hire chief executive of Saudi
and stopped it from signing up more to come in 2022. car firms in the capital. Aramco warned that the rapid
new users. Didi will relist its London is one of Uber’s biggest transition towards economies
shares in Hong Kong. Productivity among American urban markets. with net-zero emissions is
workers in the third quarter based on “highly unrealistic
declined by 5.2% from the scenarios and assumptions”,
A slap for spacs previous quarter (on an annu­ Gridlocked and that some people find it
Grab’s share price struggled to alised basis), the steepest such hard to admit that fossil fuels
recover from the hammering it fall since 1960. The number of Hours lost in traffic congestion will be around for some time.
Global, top ten cities, 2021
took on its first day of trading hours worked rose by 7.4%, far Average per driver Amin Nasser said the high cost
on the Nasdaq exchange. The outpacing a 1.8% jump in of switching to net zero could
City Hours City Hours
Singaporean “super­app”, output. The supply­chain cause social unrest.
1 London 148 6 Rome 107
which offers a wide range of crunch may have been a factor.
services on its platform across 2 Paris 140 7 Chicago 104 Always looking to improve
South­East Asia, listed by The takeover of Arm, a British 3 Brussels 134 8= Lyon 102 efficiency with new tech­
merging with a special­pur­ chip designer, by Nvidia, an 4 Palermo 109 8= New York 102 nology, management has
pose acquisition company American company which 5 Moscow 108 10 Bucharest 98 found a way to extend Zoom’s
(spac), a process that avoids designs and sells computer Source: INRIX 2021
usefulness beyond wasteful
the rigours of a regular ipo. chips, came closer to collapse. meetings: mass redundan-
Grab’s stockmarket debut had America’s Federal Trade Com­ A report from inrix, a trans­ cies. The ceo of Better.com, a
been one of the most eagerly mission sued to block the deal, port analytics firm, found that mortgage firm, told the 900
awaited flotations of 2021. arguing that it will harm com­ London had become the staff who had joined a video
petition. British and eu reg­ world’s most congested city, call that their employment was
The uncertainty surrounding ulators are also investigating with motorists spending an “terminated, effective imme­
Chinese tech was a factor the takeover, though the eu average of 148 hours in traffic diately”, because of changing
pulling down Weibo’s share has paused its inquiry. The jams during 2021. The report market conditions. The boss
price on its first day of trading takeover was announced more (which omits cities such as later apologised for the way he
on the Hong Kong exchange. than a year ago. Cairo and Lagos where Inrix handled the lay­offs.
The internet company’s stock
fell by 7% in the secondary
listing; it also has shares trad­
ing on the Nasdaq market.

Samsung Electronics over­

hauled its senior management
team and is to merge its smart­
phone business with its
hitherto separate and wider
consumer­electronics divi­
sion. Combining the two will
boost Samsung’s ability to
provide customers with
joined­up services across
devices, similar to Apple.

Concern grew about the Rus­

sian state’s intentions for
social media when a complex
set of deals involving subsid­
iaries linked to Gazprom gave
the state­owned gas company
voting control of VKontakte,
Russia’s largest social network.
Its chief executive stepped

012
012
 Leaders 13

What would America fight for?

If the United States pulls back, the world will become more dangerous

E ighty years ago Japan bombed Pearl Harbour. It was a grave

error, bringing the world’s mightiest country into the war
and dooming the Japanese empire to oblivion. A clear­sighted
led some to doubt America’s willingness to defend its friends or
deter its foes, and many to worry about the competence of its
planning. The president’s loose words about America’s nuclear
Japanese admiral supposedly lamented: “I fear all we have done umbrella have undermined faith among allies that it still pro­
is to awaken a sleeping giant and fill him with a terrible resolve.” tects them. And though Mr Biden does not insult allies as Donald
Today Japan is peaceable, rich and innovative (see Leader). It Trump did, he often fails to consult them, eroding the bonds of
was the Japanese who rebuilt their country, but their task was trust that have long multiplied American power.
made easier by the superpower that defeated them. Not only was Just as important as the instincts of any one president is the
America midwife to a liberal, capitalist democracy in Japan; it al­ mood of the country that elects them. America is no longer the
so created a world order in which Japan was free to trade and confident hegemon of the 1990s. Its relative power has waned,
grow. This order was not perfect, and did not apply everywhere. even if it remains unmatched. After Iraq and Afghanistan, voters
But it was better than anything that had come before. have grown weary of foreign adventures. Partisan politics,
Unlike previous great powers, America did not use its milit­ which once stopped at the water’s edge, paralyses most aspects
ary dominance to win commercial advantage at the expense of of policy. Over 90 ambassadorial posts remain vacant, blocked
its smaller allies. On the contrary, it allowed itself to be bound, by Congress. America has refused to join a trade pact that would
most of the time, by common rules. And that rules­based system have complemented its military ties in Asia with economic
allowed much of the world to avoid war and grow prosperous. ones. The relentless drama of politics, including over such
Unfortunately, America is tiring of its role as guarantor of the things as disputed elections and mask­wearing, makes America
liberal order. The giant has not exactly fallen asleep again, but its seem too divided at home to show sustained purpose abroad.
resolve is faltering and its enemies are testing it. Vladimir Putin It would be a mistake to assume that the old, engaged Amer­
is massing troops on the border with Ukraine and could soon in­ ica will come back—after all, Mr Trump may be re­elected in
vade. China is buzzing Taiwan’s airspace with fighter jets, using 2024. If the liberal order is to be preserved, other powers will
mock­ups of American aircraft­carriers for target practice and have to do their bit, both to prepare for a world in which they
trying out hypersonic weapons. Iran has taken have less help, but also to keep America en­
such a maximalist stance at nuclear talks that gaged. There are some signs of this. Japan and
many observers expect them to collapse. Thus, Australia have signalled that they would help
two autocratic powers threaten to seize land defend Taiwan. Britain has joined America in
currently under democratic control, and a third sharing nuclear­submarine propulsion tech­
threatens to violate the Non­Proliferation Trea­ nology with Australia. A new German govern­
ty by building a nuclear bomb. How far would ment is hinting at a tougher line against Russia.
America go to prevent such reckless acts? More adaptation to a world with less Amer­
Joe Biden can sound forceful, at times. On ica will be required. Democracies, especially in
December 7th he warned Mr Putin of severe consequences if Europe, should spend more on defence. Those, such as Taiwan
Russia were to launch another attack on Ukraine (see Europe and Ukraine, at risk of being attacked should make themselves
section). He has maintained sanctions on Iran. And in October indigestible, for example by beefing up their capacity for asym­
he said that America had a “commitment” to defend Taiwan, metric warfare. The better prepared they are, the less likely their
though aides insisted policy has not changed. (America has long foes are to attack them.
refused to say whether it would send forces to repel a Chinese in­ Fans of the rules­based order should share more intelligence
vasion, so as not to encourage any Taiwanese action that might with each other. They should bury old quarrels, such as the futile
provoke one.) China was left wondering whether Mr Biden mis­ spats between Japan and South Korea over history. They should
spoke or was craftily hinting at a more robust stance. On Decem­ forge deeper and broader alliances, formally or informally. In­
ber 7th America’s House of Representatives passed a big boost to dia, out of self­interest, should relinquish the vestiges of non­
the defence budget (see United States section). Also this week Mr alignment and draw closer to the Quad, with Australia, Japan
Biden was to hold a “Summit for Democracy”, to encourage and America. nato cannot admit Ukraine, since the rules say an
countries that respect the rules to club together. attack on one is an attack on all, and Russia has already occupied
And yet, as our Briefing explains, America has become reluc­ Ukrainian territory. But nato members can offer Ukraine more
tant to use hard power across much of the world. A coalition of arms, cash and training to help it defend itself.
hawks and doves in Washington is calling for “restraint”. The If the liberal order breaks down, America’s allies will suffer
doves say that by attempting to police the world, America inev­ grievously. Once it is gone, Americans themselves may be sur­
itably gets sucked into needless conflicts abroad that it cannot prised to discover how much they benefited from it. Yet all is not
win. The hawks say that America must not be distracted from lost. A determined and united effort by democracies could pre­
the only task that counts: standing up to China. serve at least some of the rules­based system, and prevent the
Either of these two visions would entail a partial, destabilis­ world from sliding back towards the dismal historical norm, in
ing American retreat, leaving the world more dangerous and un­ which the strong prey unchecked on the weak. Few tasks are
certain. Mr Biden’s debacle in withdrawing from Afghanistan more important, or harder. n

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 14 Leaders The Economist December 11th 2021

The Federal Reserve

Wind down the money printer

Why America’s economy needs tighter monetary policy

T he federal reserve has spent most of 2021 saying that high Fed estimates that the median consumer expects prices to rise at
inflation would be temporary. And yet price rises have per­ an annual pace of 4.2% over the next three years, up from 3% in
sistently overshot forecasts, reaching 5% in October, on the Fed’s January 2021, suggesting they may demand higher wages. Rising
preferred measure, even as employment remains about 4m inflation expectations also reduce the effective cost of credit, be­
short of its pre­pandemic level. On December 15th the Fed will cause inflation makes debts easier to repay. The real interest rate
decide whether to tighten monetary policy, probably by acceler­ over five years on government bonds is about ­1.6%, lower than
ating the pace at which it “tapers” its monthly purchases of as­ in almost all of 2020, when the economy was far weaker.
sets, mostly government bonds, which are currently running at The latest argument from some doves is that nominal gdp, or
$90bn per month. It should go ahead and take action. Though total cash spending in the economy, is merely on its pre­crisis
uncertainty is high, the Fed must rapidly respond to the data it trend. This proves that pandemic­related distortions, not exces­
has today and then adjust as necessary as conditions evolve. sive demand, have driven up prices, they say. Yet though this ar­
Those data indicate that it has already fallen behind. gument held in the third quarter, it may already be out of date.
The rise in prices cannot be explained by a few shortages, Nominal gdp is expected to grow at annual rates of over 10% in
such as of second­hand cars. In October the me­ the fourth quarter, compared with the trend
dian item in the consumer­price index was 3.1% PCE price index rate of just 4%. America is seeing an unusual
more expensive than a year earlier. Clothes United States, January 2019=100 surge in demand, not just constrained supply.
108
prices were up 4.3%, shelter (such as rent) was Tighter monetary policy is therefore justi­
3.5% dearer, and transport cost 4.5% more. In 2% inflation
104 fied. But if you believe the Fed’s theory of how
target
the third quarter private­sector wages and sala­ its asset purchases work, every bond it buys
ries grew at an annualised rate of 6.5%—too fast 100 adds fresh stimulus to the economy. It follows
to be compatible with the Fed’s 2% inflation tar­ 2019 20 21 that merely tapering the pace of purchases is
get without incredible productivity growth. not tightening. So why not raise interest rates
It is true that temporary factors have driven up inflation. The instead? The answer is that the Fed is bound by its past guidance
$1.9trn fiscal stimulus President Joe Biden signed in March will that it would stop buying bonds before raising rates, and that it
not be repeated (the outlay proposed in the Democrats’ social­ would avoid ending purchases abruptly. Abandoning that
spending bill is more spread out and partly offset by tax rises). framework would lead investors to question the central bank’s
During the pandemic, consumers have binged on goods. Supply trustworthiness and to expect an excessive number of addition­
chains have been bunged up, especially as the world’s factories al interest­rate increases in 2022.
have faced lockdowns and staff absences. Despite an abnormal The good news is that the Fed can taper fast enough to let it
number of Americans out of work, firms have struggled to fill va­ raise interest rates in March. If between now and then the pan­
cancies (see Finance and economics section). demic greatly worsens, consumers slash their spending on
However, predicting when these pandemic­related forces goods or many missing workers return to the labour force, mon­
will ease is a fool’s errand, especially now that the Omicron var­ etary policymakers can change course again. But they must give
iant is spreading. For as long as inflation remains high, there is a themselves scope to raise rates soon. In an ideal world it is an op­
growing danger that it will become entrenched. The New York tion that would already be on the table. n

Adapting for the future

What the world can learn from Japan

The country is not an outlier—it is a harbinger

T wo tales are often told about Japan. The first is of a nation in

decline, with a shrinking and ageing population, sapped of
its vitality. The second is of an alluring, hyper­functional, some­
problems hit Japan early makes it a useful laboratory for observ­
ing their effects and working out how to respond.
One lesson is that societies must learn to live with risk. As the
what eccentric society—a nice place to eat sushi or explore climate changes and natural hazards proliferate, countries must
strange subcultures, but of little wider relevance to the outside be able to bounce back from shocks. Painful experience has led
world. Both tales lead people to dismiss Japan. That is a mistake. Japan to invest in resilience. Bridges and buildings are retro­
As our special report this week argues, Japan is not an out­ fitted to make them earthquake­proof. After a big quake hit Kobe
lier—it is a harbinger. Many of the challenges it faces already af­ in 1995, leaving many without water, the city built an under­
fect other countries, or soon will, including rapid ageing, secu­ ground system to store 12 days’ supply for residents.
lar stagnation, the risk of natural disasters, and the peril of being Many Japanese people understand that responding to disas­
caught between China and America. The fact that some of these ters is everyone’s problem, not just the state’s. That has helped

012
 The Economist December 11th 2021 Leaders 15

during the pandemic: mask­wearing has been virtually univer­ partner. It should not, in short, be a global afterthought.
sal. Among g7 countries, Japan has the lowest death rate from Japan’s mistakes offer another set of lessons. Living with lots
covid­19 and the highest rate of double­vaccination. of risk makes setting priorities harder. In the face of so many po­
Another lesson is that demography matters. Most societies tential hazards, Japan took its eye off climate change, the great­
will ultimately age and shrink like Japan. By 2050, one in six est ongoing disaster of all. In 2020 it at last pledged to reach net­
people in the world will be over 65 years old, up from one in 11 in zero carbon emissions by 2050, but the details are sketchy. Poli­
2019. The populations of 55 countries, including China, are pro­ ticians pin their hopes on restarting nuclear plants mothballed
jected to decline between now and 2050. Recent data suggest In­ after the Fukushima meltdown in 2011; this is unlikely as long as
dia will shrink sooner than expected. the public overestimates the dangers of nuclear power. Many
Like climate change, the demographic sort is vast, gradual bureaucrats, meanwhile, remain stubbornly sceptical of renew­
and seems abstract—until it is not. And like climate change, it able energy. So Japan keeps burning coal, the filthiest fuel.
will demand a transformation both of institutions and of indi­ One way to cope with a shrinking population is to get the
vidual behaviour. Remaining active for longer most out of people. Japan will never live up to
is essential. The Japanese government urges its potential while so many of its highly educat­
firms to keep staff until they are 70. Many stay ed citizens are denied the chance to live up to
on: 33% of 70­ to 74­year­olds now have jobs, up theirs. Seniority­based promotion at tradition­
from 23% a decade ago. al companies, combined with excessive defer­
Demographic change brings big economic ence to grey hairs, silences young voices and
challenges (see Free exchange). Japan owes its stifles innovation. That is why many of the
sluggish growth in large measure to its shrink­ brightest new graduates prefer to work for start­
ing population. If you look at the well­being of ups. Japan has done a good job of getting more
individual Japanese people, however, the picture is far rosier. In women into the workforce in recent years, but they still have too
the decade from 2010 to 2019, Japan enjoyed the third­highest few chances to rise. A dual­track labour system traps young peo­
average rate of gdp growth per head in the g7, behind only Ger­ ple and women in precarious part­time jobs (which, among oth­
many and America. er things, makes them less keen to have children).
Japan is a major creditor and the third­largest economy at Politicians tolerate all this in part because they feel little
current exchange rates. Its people live longer than the citizens of pressure to do otherwise. The Liberal Democratic Party has re­
any other country. It is home to the biggest technology investor mained in power almost uninterrupted since 1955, thanks to a
on the planet, a pioneering 5g firm, and a host of global brands, pathetically weak opposition. Senior figures, typically old men
from Uniqlo to Nintendo. Expertise in robots and sensors will from political dynasties, are more conservative than the public
help its firms make money from a wide range of new industrial they supposedly represent. For the public, in turn, today’s com­
technologies. Geopolitically, Japan plays a pivotal role between fort dulls the impulse to press for a brighter tomorrow. Japan’s fi­
China, its largest trading partner, and America, its key security nal lesson is about the danger of complacency. n

Global finance

Asymmetric decoupling
China seeks globalisation, on its own terms

E ver since the start of the trade war between America and
China, investors, politicians and businesses have been try­
ing to gauge how far and how fast the world’s two biggest econo­
that American markets offered a lower cost of capital, more so­
phisticated investors and better corporate governance. Main­
land regulators even turned a blind eye to fiddly legal work­
mies will decouple from each other. The pattern in finance is be­ arounds, known as variable interest entities (vies), that allowed
coming clearer with the news that Didi Global, a Chinese ride­ ambitious Chinese tech firms to circumvent arcane mainland
hailing firm, plans to delist its shares from New York, just six restrictions on foreign ownership.
months after an initial public offering (ipo) there. Over the past two years the mood has shifted. In 2019 Alibaba,
It is likely that all the $2.1trn of other mainland Chinese the most valuable Chinese firm listed in New York, sought an ad­
firms’ shares traded in the Big Apple will eventually follow suit, ditional listing in Hong Kong: in effect, a financial plan B. Now
with the approval of the Chinese Communist Party. Yet do not Didi will go further by leaving New York altogether. It is said to
imagine that China’s rulers seek financial isolation. For at the be under pressure from the Cyberspace Administration of China
same time, they are busy welcoming Wall Street firms into the to shift its listing, probably to Hong Kong, which is increasingly
mainland’s financial system. China is pursuing a strategy of under the direct supervision of the mainland government.
asymmetric decoupling: reducing its dependence on the West Meanwhile, it seems likely that new vies will be banned.
even as it seeks to increase the West’s dependence on China. Didi One reason for the shift is an American law, targeted at Chi­
will not be the last example of this approach. nese firms, which requires foreign companies to reveal the gory
For decades China’s government tolerated and sometimes details of their audits or be forced off American exchanges. Do
encouraged companies to raise capital in distant markets. When not mistake this as a defeat for China. It is not severing links
the first Chinese firm went public in New York in 1993, cross­bor­ with global finance. Instead it is opening up the mainland mar­
der listings were endorsed by authorities, which acknowledged kets and coaxing Western banks, insurers and fund managers to

012
 16 Leaders The Economist December 11th 2021

enter and play by its rules. Many Wall Street firms are being giv­ Asymmetric decoupling raises two questions. One is whether
en new licences and are expanding their operations in China. America’s approach is effective. The more it punishes Chinese
JPMorgan Chase’s cross­border exposure to the country has ris­ firms, whether those listed in America or those that buy Ameri­
en by 9% since 2019. Foreign portfolio investors’ holdings of can high­tech components, the more China develops its own ca­
stocks and bonds have almost doubled over the past three years, pabilities, undermining American pre­eminence and creating
to $1.1trn. Even as Xi Jinping, China’s president, unleashed a war alternatives for third countries to use. That could leave America
on big tech and tycoons under the banner of “common prosper­ with less global influence, not more.
ity”, more than $100bn flowed into mainland markets in the first The other question is where else China will apply its asym­
nine months of 2021. metric strategy. It can already be seen in the commodities indus­
China hopes it can have the best of both worlds—access to try, with more trading happening on the mainland, and in tech,
global funds and know­how, but under its direct supervision. where China is trying to develop home­grown semiconductors.
There are obvious risks, from a Chinese perspective. China’s do­ But the most glaring dependence of all that China has is on
mestic markets are still unfamiliar territory in some ways, and America’s currency, which is used for most cross­border pay­
foreign investors may not commit as much capital because they ments and which exposes it to sanctions and the threat of exclu­
are worried about currency controls, unfair treatment at the sion. If Mr Xi cannot tolerate a ride­hailing firm being listed in
hands of regulators and the risk of expropriation. Yet ultimately New York, it is a good bet that he is even less keen on China being
the vast size of China’s market and depth of its corporate scene subordinate to the greenback. He is surely doing everything
mean they find it hard to say no. within his powers to develop an alternative. n

Charging electric cars

Plugging the gap

Tens of millions of electric cars will soon need charging. Here’s how to do it

T ake the wheel of an electric vehicle (ev) and prepare to be ing charging companies. Utilities, which have plenty of electri­
astounded. The smooth, instant acceleration of battery pow­ city to sell, are also starting to sniff around.
er makes driving easy and exciting. The latest technology is Yet the charging business suffers from big problems. One is
there, with tablet­like screens instead of old­fashioned switch­ how to co­ordinate between the owners of charging points, the
es. Add falling prices which make owning and running many evs owners of the sites where they will be installed, planning au­
as cheap as fossil­fuel alternatives, and the open road beckons. thorities and grid firms. Another is the cost. According to one es­
Except when you look under those sleek exteriors. The tangle timate, the bill for the chargers needed to reach net­zero by 2050
of cables in the boot is a reminder of the need to plug in and re­ will be $1.6trn. To start with, profits may be elusive because the
charge cars roughly every 250 miles (400km). And when you do networks will not at first be heavily used. A related risk is that
find a public charging point, it is sometimes damaged or inac­ the coverage will have gaps. California is a choice spot for in­
cessible (see Business section). Little wonder that one of the stalling chargers, but is anyone keen on investing in Nebraska?
main reasons drivers give for not buying an ev is “range anxiety”. And then there is the question of competing networks. Drivers
A society­wide switch from hydrocarbons to electrons is re­ should be able to switch from one to the other without the hassle
quired if the world is to stand a chance of reach­ of having to sign up to them all.
ing its net­zero emissions targets. However as EV public charging points What to do? Governments are experiment­
evs become more common, the charging prob­ Global ing. As well as subsidising ev sales many are
lem will become more severe. Today’s mostly 2020 1.3m throwing cash at public chargers. America’s in­
wealthy owners can often plug in their ev at frastructure law sets aside $7.5bn to create
2030* 40m
home or at work. But many less­well­off ev 500,000 public stations by 2030. Britain plans
drivers will not have a drive in front of their 2050* 200m to require new buildings to install chargers. Yet
house or a space in the executive car park. *Forecast the sums are puny and the problems of co­ord­
By 2040 around 60% of all charging will ination, coverage and convenience will remain.
need to take place away from home, requiring a vast public net­ Governments should learn from telecoms. Most countries
work of charging stations. At the end of 2020 the world had just auction or issue a limited number of licences or spectrum rights
1.3m of these public chargers. By some estimates, to meet net­ to firms to run regional and national mobile networks. In return
zero emissions goals by 2050 will require 200m of the things. the firms have to build networks according to a schedule, offer
Who might install them? Drivers will need a mix of fast “long­ universal coverage and compete with each other. Regulators set
distance” chargers installed near motorways that can rapidly rules to allow roaming between them.
add hundreds of miles to battery ranges and slower “top­up” This approach has its flaws. Poorly designed auctions in Eur­
chargers available at kerbsides or in the car parks of shopping ope left firms with too much debt, and competition has become
centres, restaurants and so on. The private sector, sensing an op­ less intense in America. But in the past two decades the world
portunity to make some money from surging ev ownership, is has marshalled over $4trn of spending on telecoms infrastruc­
already showing an interest. Dedicated charging firms and car­ ture. And the mobile phone has turned from a shiny object for
makers are investing in infrastructure. Oil companies, with rich people into something in everyone’s pocket. The bright
Shell to the fore, are putting chargers in petrol stations and buy­ sparks running climate policy should take note. n

012
 Executive focus 17

EXCITING OPPORTUNITY TO HEAD AN

AID FOR TRADE ORGANISATION
IN AFRICA Growing Prosperity Through Trade

TradeMark East Africa (TMEA) is an aid-for-trade organisation that was established with the aim of
growing prosperity in East Africa through increased trade. TMEA, which is funded by a range of
development agencies, operates on a not-for-profit basis. TMEA is funded by the development agencies
of the following countries: French Development Agency (AFD), Belgium, Canada, Denmark, Finland,
Irish Aid, the Netherlands, Norway, United Kingdom, United States of America and the European
Union. We work closely with East African Community (EAC) institutions, national governments,
the private sector, and civil society organisations to increase trade by unlocking economic potential
through increased physical access to markets, enhanced trade environment and improved business
competitiveness. We believe that enhanced trade contributes to economic growth, a reduction in
poverty and subsequently increased prosperity. TMEA has its headquarters in Nairobi, Kenya with
branches and operations in Arusha (at the East African Community), Burundi, Democratic Republic of
Congo, Ethiopia, Hargeisa, Rwanda, South Sudan, Tanzania, and Uganda. TMEA is now expanding its
trade facilitation programme and launching operations in Djibouti and Malawi.

We are now looking to appoint an outstanding leader to head TMEA as its next Chief Executive Officer.

Chief Executive Officer

Reporting to the TMEA Board of Directors, the Chief Executive Officer will be responsible for overall
leadership of TMEA, overseeing a $600m portfolio over 12 countries. Working with a capable team of
trade facilitation professionals, the successful candidate will set out TMEA’s medium- and long-term
strategy, and deliver it with energy, sound judgement and integrity.

The Chief Executive Officer will be expected to have substantial technical knowledge of the African
regional trade agenda, trade facilitation, and major multilateral and bilateral trade agreements which
affect East African countries, and bring significant experience in leading and managing major economic
development co-operation programmes, preferably in regional integration, trade facilitation, customs
and investment climate reform, corridor development, and/or institutional reform for international
donor organisations.

The ideal candidate will possess a minimum 15 years’ experience (5 of which should be in Southern
and East African countries) in leading and managing major economic development cooperation
programmes preferably in regional integration, trade facilitation, customs and investment climate
reform, corridor development and/or institutional reform for international donor organisations.

Application details
TMEA is being supported by the executive search firm Oxford HR in this recruitment.:
https://oxfordhr.co.uk/jobs/chiefexecutive-officer-6/. The deadline for receiving applications is
Wednesday, 22 December 2021. Only shortlisted candidates will be contacted.

TMEA is an equal opportunity employer and is committed to open and transparent recruitment
processes. Qualified women and persons living with disabilities are particularly encouraged to apply.

012
 18
Letters The Economist December 11th 2021

discussed the paradox of a hand, was a strong opponent Once Britain’s and
Curtailing the state government that was suppos­ and would surely not approve America’s single largest recipi­
Your briefing on the ever­ edly committed to rolling back of your misuse of his “small is ent of aid, this nuclear­armed
expanding state (“The great the frontiers of the state beautiful”. state supported the Taliban
embiggening”, November spending ever larger sums on professor russell mckenna over many years then directed
20th) generously cited a social controls: police, prisons, Chair in energy transition the subversion of the Afghan
proposal by one of us to punishment and surveillance. University of Aberdeen government. Its actions
partially privatise migration Ashdown saw the compulsory should not be consequence­
policy in order to limit the conscription of the poor into Just operating most existing free and we should either
growth of government. Since “training” or low­paid jobs as reactors costs more than ener­ remove all aid to Pakistan or
then we have worked together akin to the very methods that gy efficiency or new renew­ demand the reasonable
to leverage ideas from that line the Soviet Union was trying to ables, which in 2020 became behaviour of the Taliban,
of thinking paired with block­ move away from. the cheapest bulk power Islamabad’s client in Kabul, as
chain technology to explore Jo Grimond, in the fore­ source in 90% of the world. the condition for continuing
the decentralised provision of word of Ashdown’s book, Existing American subsidies aid. Either way, it is not the
public goods. One promising argued that Margaret Thatch­ already rivalled nuclear con­ people of Afghanistan who
experiment has been Gitcoin’s er’s cabinet did not actually struction costs. More billions should suffer.
use of matching funds to believe in small government, or tens of billions of dollars in simon diggins
support a democratised crowd­ lower taxation, less regulation, current new subsidies to Defence attaché, Kabul 2008­10
funding platform in the the spread of wealth and power distressed (or even to all) Rickmansworth, Hertfordshire
Ethereum ecosystem, direct­ or competition. Thatcherism reactors only compounds the
ing tens of millions of dollars was little more than another misallocation. It diverts even
so far with a minimal team. form of corporatism. greater resources from more­ Double trouble
Experiments like this william francis climate­effective competitors Johnson was wrong to accuse
illustrate how fiscally big London that can’t contest market space users of the past tense “pled”
government need not imply or access grid capacity hogged of being in error (November
administratively big govern­ by taxpayer­funded zombie 13th). It is, in fact, a dialectal
ment. Thus the need for Nuclear’s waste problem reactors. variant, like the spelt/spelled
greater public good as tech­ As a low­carbon, reliable and amory b. lovins variation that he discussed. If
nology advances need not generally safe baseload power Adjunct professor of civil and Johnson were to give himself
imply the growth of the source, nuclear energy may environmental engineering the pleasure of reading Scot­
administrative state. have a role in the transition Stanford University tish law reports, he would find
vitalik buterin away from fossil fuels (“The Stanford, California that “pled” is the long­estab­
Founder discreet charm of nuclear lished past tense of “plead”
Ethereum power”, November 13th). But let north of the River Tweed.
The Ether us not forget the main motiva­ Chess queens alan simcock
e. glen weyl tions for the current energy There is a similar gender im­ London
Founder transition, namely climate balance in chess to the lack of
RadicalxChange Foundation change and depleting finite women in top e­sports (“Con­ After I cut the weeds in my
Kirkland, Washington resources. This argument is sole sisters”, November 27th). lawn with my Weedeater I
entrenched in the Brundtland Jennifer Shahade wrote about asked my family what I had
A focus on state size as mea­ Commission’s definition of this in “Chess Bitch”. Published just done. “Weedeatered”
sured by government spending sustainable development from in 2005 it offered a counter­ didn’t sound right. Betsy said I
and taxation ignores the many the 1980s, which is in effect not example. In Georgia there are “Weedate” it. Bert said that
ways in which the British state to oblige future generations to many strong female chess sounded pretentious; I
grew dramatically during the clean up our mess. This is players, attributed to a culture “Weedeated”. My spell check
1980s. The central government precisely where nuclear power in that country that encourag­ rejected all those words.
was more than willing to falls short. The long­term es women to play the game. Elizabeth said I “ate weed”.
increase its power to engage in legacy waste issue is a negative nelson minar j.k. coward
its own brand of social engi­ environmental externality Grass Valley, California Sylva, North Carolina
neering. Local authorities had with potential economic and
their control over education social consequences for our Johnson should be cautious
weakened by the introduction descendants of the same mag­ Aiding Afghanistan about merging the past tenses
of the national curriculum. nitude as climate change. The Your call for the West to hold “hanged” and “hung” into one
Their control over social hous­ fact that these impacts, unlike its nose, deal with the Taliban word. There is a big difference
ing was curtailed by right­to­ climate change, are largely not and ensure that the Afghan between being well­hanged
buy legislation. Local budgets yet felt today does not mean people do not starve this win­ and well­hung.
were increasingly subject to we should replace one ter is absolutely correct (“War, peter kendall
central­government control. problem with another. drought, famine”, November London
Councils’ efforts to fight I am neither for nor against 13th). If we have to abandon
homophobia were crushed by nuclear power, but I do strong­ temporary hopes of human
the infamous Section 28. ly agree with you that all development, we can at least Letters are welcome and should be
For the most economically energy sources have their ensure that people survive to addressed to the Editor at
The Economist, The Adelphi Building,
marginalised in society, the drawbacks and we must have change things in the future. As 1-11 John Adam Street, London wc2n 6ht
state became a despotic Levia­ the full picture in view when for hypothecating aid to devel­ Email: letters@economist.com
than. In 1989 Paddy Ashdown considering alternatives. Ernst opment, that weapon would be More letters are available at:
Economist.com/letters
wrote “Citizen’s Britain”, which Schumacher, on the other better directed at Pakistan.

012
 Briefing American foreign policy The Economist December 11th 2021 19

A weary superpower proclaiming “America is back”, chaotically

left Afghanistan, barely consulting allies.
His “foreign policy for the middle class” is
Trump­like in its protectionism. What is
more, Mr Trump still dominates the Re­
publican Party and may be back in the
White House in 2025. An America that
HONO LULU
once waged a global “war on terror” and
The world that the West built after the attack on Pearl Harbour is cracking,
sought to democratise the Muslim world is
not least because America is lukewarm about preserving it
turning inward, if not retrenching.

A line of white­painted moorings in

Pearl Harbour—the old “Battleship
Row”—maps America’s trajectory in the
abandoned isolationism and, with “righ­
teous might”, entered the war in the Pacif­
ic. Four days later Hitler declared war on
Echoes of the interwar years are multi­
plying. Many countries are suffering from
a pandemic, economic malaise and politi­
second world war. At one end a memorial America, ensuring that it would join the cal discontent. In Europe a revanchist
straddles the sunken remains of the uss war in Europe, too. Victory in the global power, Russia rather than Nazi Germany, is
Arizona, a battleship destroyed during Ja­ conflict, hastened by the use of nuclear massing troops and menacing a neigh­
pan’s surprise attack on December 7th 1941. weapons against Japan, established Amer­ bour—Ukraine. In Asia a rising power, Chi­
Most of the 1,177 sailors who perished on ica as the world’s dominant power, which na rather than imperial Japan, is arming
board remain entombed in the wreck. At would go on to defeat the Soviet Union in for a possible invasion—of Taiwan. It seeks
the other end, the uss Missouri looms the cold war. to displace America in the name of Asia for
above the treeline with imposing 16­inch Asians. And the idea of enforcing arms
guns. It was on her deck that General Dou­ New world disorder control as a means of preserving the peace
glas MacArthur accepted the formal sur­ These days the liberal global order that is proving as difficult as it did in the 1930s,
render of imperial Japan, ending the war. America and its allies built over decades is with Iran and North Korea resisting efforts
“The ships are the book­ends of the breaking down, not least because succes­ to rein in their nuclear programmes.
war,” says James Neuman, the official his­ sive American presidents have lost faith in Another reverberation from the past is
torian of Pearl Harbour’s naval base. “Their one or other of its tenets. Barack Obama the emergence of an American school of
legacy is with us every single day.” Families drew a red line against Syria’s use of chem­ thought advocating “restraint” in foreign
of deceased veterans still come to scatter ical weapons but did not enforce it. He policy. This is not 1930s­style isolationism:
their ashes in the water. Some 30 survivors withdrew from Iraq in 2011, only to return today’s restrainers accept that America was
of the attack attended a ceremony this when jihadists filled the vacuum. Donald right to fight the Axis powers, but they urge
week to mark its 80th anniversary. Trump embraced dictators, threatened to it to stop chasing “global supremacy”.
The “date which will live in infamy”, as forsake allies and sought to dismantle in­ Admittedly, much is different from
Franklin Roosevelt called it, transformed ternational institutions and norms that eight decades ago. The spread of nuclear
America’s place in the world. The country America had long fostered. Joe Biden, after weapons makes great­power conflict more

012
 20 Briefing American foreign policy The Economist December 11th 2021

terrifying and less likely. The configura­ early in the second world war, between the too strong for most politicians. Commen­
tion of global alliances has shifted: Japan fall of France in June 1940 and the attack on tators chastise it for endangering global
and Germany are firmly in the American Pearl Harbour. Having previously believed stability and America’s security, and being
camp; China and Russia are moving closer that neutrality was necessary to protect soft on Chinese human­rights abuses.
together. And after decades of globalisa­ American democracy, and that an open Public opinion is ambivalent. A poll for the
tion, the world is more interdependent world order could be preserved by interna­ Chicago Council on Global Affairs last
economically. Even so, America’s self­ tional institutions, America’s policymak­ summer found that Americans approved
doubt, suspicion of globalisation, hyper­ ers concluded that henceforth these would of the withdrawal from Afghanistan, but
partisan politics and unpredictable policy­ have to be upheld by armed might. Now, were far from ready to abandon American
making prompt allies to question the reli­ Mr Wertheim argues, the opposite is true. primacy in the world. For the first time, a
ability of American power. What is Ameri­ Primacy “makes America less safe”, he majority favoured defending Taiwan.
ca still prepared to fight for? says. “It makes enemies of people, who Richard Fontaine, head of the Centre for
then take action against the United States, a New American Security, a think­tank
Troubles in battalions which then takes action against them.” The whose alumni occupy some prominent po­
As the world’s great power, America ends Carter doctrine, proclaimed in 1980, is a sitions in the Biden administration, says
up having to deal with all its problems, case in point. It asserted that any attempt opinion among foreign­policy experts is
from the war in Ethiopia to the instability by outside powers to gain control of the broadly split by generation: younger schol­
in Latin America that is driving migrants to oil­rich Persian Gulf would be regarded as ars, dejected by years of fruitless war in
its southern border. However, it is the in­ an assault on American vital interests. Iraq and Afghanistan, are often sympathet­
tensifying disputes with China, Russia and America was thereafter drawn into the ic to the idea of restraint. Any zeal to export
Iran that are likeliest to test Mr Biden’s Middle East’s endless troubles. Too often, democracy has abated. “There is a big disil­
mettle. It is tempting to see them as signs Mr Wertheim says, America has done the lusionment with the missionary role,” he
of America’s decline. Has the debacle in Af­ bidding of Israel and Arab allies. notes. “They say, ‘after Trump, the Capitol
ghanistan inspired the trio to challenge The prime venue for such thinking is riots and covid, are we really going to tout
America’s resolve? A senior White House the Quincy Institute for Responsible State­ our model?’”
official rejects the suggestion: all three are craft, a think­tank in Washington set up in These ideas have been seeping into
acting out of “fundamental dynamics” that 2019 with money from both Charles Koch, a Washington’s discourse—both among
predate Mr Biden’s election. China and generous funder of right­wing causes, and doves who want to reduce America’s com­
Russia are motivated by irredentism, fear­ George Soros, a supporter of liberal inter­ mitments globally, and among China
ing that Taiwan and Ukraine respectively nationalist groups. Quincy cheered the hawks who want America to do less in the
are slipping away (largely because of their withdrawal from Afghanistan. “We were Middle East and Europe the better to direct
own bullying). Iran is exploiting the breach very much heartened by Biden’s decision,” attention and resources to Asia and the Pa­
Mr Trump created when he abrogated Mr says Andrew Bacevich, its president. He cific. What of Mr Biden himself? “On one
Obama’s nuclear deal in 2018. urges Mr Biden to leave the Middle East side, he looks like our kind of guy,” says Mr
Mr Biden has been trying to quieten next. He also thinks America should, over Bacevich. “On the other, defence spending
things through diplomacy. At a video­con­ time, withdraw from nato and close many is going up for no particular reason. And
ference summit on December 7th, he of its 750­odd military bases and depots the administration seems to be leaning in­
warned Vladimir Putin, Russia’s leader, around the globe (see map). Such ideas to the idea of a cold war with China. Right
against invading Ukraine. Last month, dur­ have deep roots. The think­tank takes its now, Biden is all over the map.”
ing a similar encounter with Xi Jinping, name from America’s sixth president, John Several of the Biden administration’s
China’s president, Mr Biden said it was es­ Quincy Adams, who declared that America important national­security policies re­
sential to “ensure that the competition be­ “goes not abroad, in search of monsters to main in gestation. It has not yet issued a
tween our countries does not veer into destroy”. George Washington’s farewell ad­ national­security strategy, and its nuclear
conflict, whether intended or unintend­ dress in 1796 enjoined the young nation to “posture” is under review. Matters are not
ed”. Meanwhile, in Vienna, American and “to steer clear of permanent alliances with helped by the fact that many important
Iranian diplomats have resumed nuclear any portion of the foreign world”. jobs in national security and the diplomat­
negotiations after a five­month hiatus. Yet the Quincy Institute’s medicine is ic corps remain empty.
But America’s ability to jaw­jaw de­
pends, at least to an extent, on its stomach
for war­war. Hawkish strategists have long
believed that America must be able and
willing to use force not just in one conflict
at a time but in several at once. These days, Britain 25 Germany 119
however, mainstream foreign­policy
thinkers increasingly argue that America United States
South Korea 73 Japan 120
can no longer try to do everything, every­ Puerto Rico* 34 Italy 44
where, and must choose where to focus its
political attention and finite resources. Re­
strainers go further: many of them think
that none of the three looming crises is Guam* 54
worth going to war over, and that any mili­
tary build­up intended to ward them off
might in fact make conflict more likely.
In “Tomorrow, the World”, Stephen
Wertheim of the Carnegie Endowment for United States, military presence overseas, 2021
International Peace, a think­tank in Wash­
Small facilities Bases† 25 or more bases
ington, argues that a transformation in
Source: David Vine, “Lists of US military bases abroad, 1776-2021” *US territory †Including shared facilities
America’s strategic thinking took place

012
 The Economist December 11th 2021 Briefing American foreign policy 21

proxies (who run a breakaway chunk of the

east). American officials say Mr Putin is
making preparations to take another bite
of Ukraine, but may not yet have decided
whether to go through with this plan.
At their video meeting this week, Mr Bi­
den delivered a stern warning to Mr Putin.
If Russia invades it is likely to get bogged
down in a long conflict; America and Euro­
pean countries will impose severe sanc­
tions; nato will be compelled to increase
deployments close to Russia’s borders and
America will boost its delivery of arms to
Ukraine. If he de­escalates, though, Ameri­
ca and European allies are willing to offer
Mr Putin a broad dialogue about security in
Europe, though that may fall short of Mr
Putin’s demands, such as a guarantee that
Ukraine will never join nato.
Although Mr Biden is extremely unlike­
China has more ly to deploy troops to protect Ukraine, Kurt
Volker of the Centre for European Policy
Mr Biden’s interim national­security years later. The pact limited Iran’s nuclear Analysis, another think­tank, has no doubt
guidance, issued in March, emphasises programme for a decade or more and sub­ that he would uphold America’s commit­
economic regeneration at home as the jected it to strong inspections thereafter, in ment to defend nato allies in Europe, in­
foundation of American power abroad. It is return for a partial lifting of sanctions. Mr cluding the Baltic republics, which like Uk­
long on global menaces. Pandemics, cli­ Biden has maintained sanctions that Mr raine were once part of the Soviet Union.
mate change, cyber threats and more are Trump imposed to exert “maximum pres­ Nonetheless, by continuing to torture Uk­
regarded as “profound, and in some cases, sure” on Iran. But the clerical regime has raine Mr Putin is trying to weaken nato by
existential dangers”. It sees a global contest responded by accelerating its nuclear pro­ seeding differences among its members
between democracies and autocracies, led gramme, reducing the time it needs to about how forcefully to respond. And each
by China (the only power it considers capa­ make a bomb’s­worth of fissile material fresh Russian provocation increases the
ble of displacing America) and Russia from a year or so to a month or less. feeling of vulnerability among nato mem­
(which plays a disruptive role). Indirect talks between America and bers on Russia’s borders. In Mr Volker’s
Mr Biden has sought to revitalise Amer­ Iran resumed in Vienna in late November. view, America’s other rivals will be watch­
ica’s alliances and partnerships. This week But the process is already faltering as ing Mr Biden’s response: “Ukraine is Rus­
he was due to rally America’s friends to the American officials accuse Iran of not nego­ sia’s Taiwan. Giving away Ukraine is the
defence of democracy at a big video sum­ tiating seriously. Mr Biden has vowed that wrong signal to send China about Taiwan.”
mit of some 100 countries. The agenda was Iran will not obtain a nuclear weapon on
vague; action is largely being left to a fol­ his watch. Officials have warned they will The dragon in the room
low­on gathering next year. Tellingly, the soon pursue “other options”. Would that America’s “intense competition” with Chi­
event was called a summit “for” democra­ include military action to destroy nuclear na is widely seen as the defining foreign­
cy, not a meeting “of” democracies. facilities? America has been reluctant to policy challenge of the age. It is the one is­
As for hard power, the guidance de­ threaten it openly, as Israel has done. “Iran sue on which Democrats and Republicans
clares that “the use of military force should thinks the risks are minimal,” says Ali Vaez can agree, more or less. At any rate, Mr Bi­
be a last resort, not the first; diplomacy, de­ of the International Crisis Group, a think­ den has retained most of Mr Trump’s sanc­
velopment and economic statecraft should tank. “There is not much more the us can tions and tariffs on China.
be the leading instruments of American put under sanctions. Iran has witnessed Near the hill above Pearl Harbour that is
foreign policy.” Roosevelt gave priority in America’s withdrawal from Afghanistan. It home to America’s Indo­Pacific Command
the war effort to Europe over Asia, even knows there is no appetite in the us for the scene appears relaxing, even soothing.
after Pearl Harbour. By contrast, Mr Biden’s military entanglement.” The admirals and generals overseeing mil­
priority is Asia, which means that he is ea­ Even if Iran is right to doubt America’s itary operations across half of the world’s
ger both to devote less time and effort to resolve, Israel may yet act alone, potential­ surface, from the coast of California to the
Europe and also to get out of the Middle ly dragging America into a war anyway. Mr Maldives, look out over a tourist paradise.
East and its “forever wars”. Yet turning Biden may want to leave the Middle East to F­22 stealth jets streak into the sky behind
principles into policy can be hard. The its fate, but in foreign policy foreigners get airliners bringing holidaymakers to Hono­
Pentagon’s review of military deploy­ a vote, too. His hand could be forced by ei­ lulu; silhouettes of destroyers at sea form
ments, completed last month, left Ameri­ ther America’s greatest regional enemy or the backdrop for surfers waiting for the
ca’s global footprint largely unchanged. its greatest regional ally. next big wave on Waikiki.
For both restrainers and China hawks, that In Europe, too, America may find itself But the speeches and reports by succes­
was a missed opportunity. drawn deeper into entanglements, even as sive commanders paint a darkening pic­
For Mr Biden, however, the unfinished Mr Biden would like his allies there to take ture. China, they say, is arming faster than
business of Iran’s nuclear programme more responsibility for their own security. most had predicted and has more warships
makes it hard to pull out of the Middle East. Russia has been massing tens of thousands than the American navy. It is developing
During his election campaign, Mr Biden of troops near Ukraine’s borders. A former the wherewithal to invade Taiwan, which it
promised to restore and improve the nuc­ Soviet republic, Ukraine has already lost regards as its own territory, and to fend off
lear deal with Iran signed by Mr Obama in part of its territory to Russia (which an­ any American forces that might come to its
2015 and repudiated by Mr Trump three nexed Crimea in 2014) and its separatist defence. At their summit, Mr Xi warned Mr

012
 22 Briefing American foreign policy The Economist December 11th 2021

Biden about meddling in Taiwan: “Whoev­ cause of this, many assume the Chinese In the meantime, Mr Biden is trying to
er plays with fire will get burnt.” Chinese will prefer tactics short of a full invasion— reinvigorate America’s network of friends,
aircraft frequently challenge Taiwan’s air­ anything from cyber­attacks, to seizing partners and allies. Officials argue that Mr
defences. Satellites have spotted Chinese outlying islands, to a naval blockade. That Biden’s diplomatic outreach has already
mock­ups of American aircraft­carriers would put America in a quandary over placed America in a better position than it
(pictured) moved on rails in the Taklama­ whether to escalate, and risk a war that was under Mr Trump. Echoing Roosevelt,
kan desert, apparently used for target prac­ could lead to the use of nuclear weapons. they note that America has become the
tice. The latest Pentagon report on China’s “The assumption is that it’s in Ameri­ world’s “vaccine arsenal”, pledging more
military power, issued last month, esti­ ca’s interest to have a forward presence and than a billion covid­19 doses with no
mated that China will roughly quintuple a shaping influence in Asia,” says Denny strings attached. A global minimum tax on
its stockpile of nuclear weapons, to more Roy of the East­West Centre, “But it’s going corporations has been agreed on. And
than 1,000 warheads, by the end of the de­ to be more expensive and more risky to America has helped push for progress in
cade (America and Russia have about sustain. We should at least ask…What the fight to curb climate change.
4,000 warheads each). China’s testing of would be the cost of retrenching?” Trade rows with the eu have mostly
long­distance hypersonic weapons is also Some restrainers favour retaining a been set aside. In June nato leaders said
worrying American generals. military presence in the Indo­Pacific to China’s behaviour presented “systemic
“balance” China. But Michael Swaine of the challenges” to the alliance. The eu has
Strait-shooter Quincy Institute says the cost of war would called for “a free and open Indo­Pacific”,
Military types tend to assume that Mr Xi be enormous. America’s best hope of echoing an American catchphrase. This
has already taken the decision to recover maintaining stability is not to embark on month it unveiled a plan to finance global
Taiwan by force, but does not yet feel China an arms race with China, but to seek an ac­ infrastructure, as America has, too, in an
is strong enough. On this measure, there is commodation based on an American com­ admittedly half­baked attempt to rival Chi­
a sense of time running out: China may mitment not to allow Taiwanese indepen­ na’s Belt and Road Initiative.
feel it has the firepower to risk a war in the dence. “You cannot have deterrence with­ In Asia a deal known as aukus will pro­
second half of this decade. Analysts of Chi­ out some degree of reassurance,” he says. vide American and British nuclear­propul­
nese politics, however, tend to believe the For all the talk of a new cold war, the sion submarine technology to Australia,
Chinese leader will be more cautious. They contest with China lacks the intense ideo­ which in turn is making it clear that it
assume he will not want to endanger either logical competition that marked the rivalry would help America in any war over Tai­
his domestic reforms or his own power by with the Soviet Union. In another way the wan. Japan, despite its history of pacifism,
launching a highly risky amphibious oper­ rivalry is fiercer: China is a more powerful has signalled that it would join in, too. The
ation. “If Xi tries and fails to take Taiwan, economic force than the Soviet Union. Ma­ three countries, plus India, make up a
he is history,” says Eric Sayers of the Amer­ ny countries that want to align with Amer­ “Quad” that is gaining geopolitical muscle.
ican Enterprise Institute, a think­tank. In ica on security matters are reluctant to for­ But managing alliances is hard, even for
his summit with Mr Biden Mr Xi said that sake their trade with China. an administration that believes in interna­
China would be “patient” on Taiwan. On a hopeful day senior American offi­ tionalism. aukus enraged France, whose
America’s stance, too, is uncertain. cials predict that Mr Biden’s investment in contract to supply submarines was can­
Since it initiated diplomatic relations with America’s infrastructure and technology, celled. Many of America’s closest allies are
mainland China in 1979, it has followed a and China’s internal problems of debt and unnerved by its forthcoming “nuclear pos­
policy of “strategic ambiguity”, whereby it ageing, will start working in America’s fa­ ture review”. Mr Biden has in the past said
refuses to say whether it would come to vour in, say, five years’ time. They also that the “sole purpose” of America’s nukes
Taiwan’s defence in the event of a Chinese dream of one day breaking Russia away should be to deter, or retaliate against, nu­
invasion. The intention is both to discour­ from China, in a mirror­image of Richard clear attack. Allies argue that, if adopted,
age China from invading and Taiwan from Nixon’s trip to China in 1972, which helped the shift would undermine America’s “ex­
formally declaring itself independent, to prise it away from the Soviet Union. But tended deterrence”, which places allies un­
which China would see as a provocation. for now Mr Putin seems to need America der its nuclear umbrella and so protects
Mr Biden, however, has sounded more more as an enemy than as a friend. them from superior conventional forces.
hawkish of late. On one recent occasion he Some may be driven to seek their own
declared that America had a “commit­ nukes. Another problem is Mr Biden’s aver­
ment” to defend Taiwan; on another he sion to free trade, notably the Trans­Pacific
said the island was “independent”. Each Partnership, an 11­country accord negotiat­
time, officials have clarified that there was ed by Mr Obama and dropped by Mr Trump.
no change of policy. “Biden’s statements By refusing to join the revised pact, Mr Bi­
could not be better. It’s perfect. It’s ambigu­ den is depriving America of a vital eco­
ous,” says David Stilwell, who worked on nomic lever in its contest with China.
China policy in the Trump administration. Nevertheless, for all America’s lurches
A more explicit commitment to defend in policy, it remains an attractive ally, espe­
Taiwan, as some now advocate, would be cially as China, Russia and Iran become
counter­productive, he argues. “If you more assertive. On the day your correspon­
draw red lines the Chinese will test them. dent visited Pearl Harbour, a pair of British
Red lines are good only if the threat to re­ patrol vessels were moored alongside
spond and impose costs is credible.” American destroyers as part of a new, se­
Taiwan is a model democracy, a vital mi­permanent deployment to the region.
producer of advanced semiconductors and A Japanese submarine was sailing out of
an important link in the “first island port, with its crew lined up topside in
chain”, running from Japan to Indonesia, white ceremonial uniform. If America re­
that girdles the Chinese mainland. Most tains its dominance in the world, it will be
pundits and officials think that, if Taiwan in no small part thanks to its ability to rally
is attacked, Mr Biden will defend it. Be­ Hard to sink former foes and old friends alike. n

012
 United States The Economist December 11th 2021 23

Defence spending was not pleased. Both chambers added

$25bn to the president’s proposal. The total
Money for something package is now the largest in a decade, the
result of a rising anxiety on both sides of
the aisle in Congress that America is losing
its military advantage, particularly on the
high seas.
WASHINGTO N, DC
For America’s armed forces, matching
What congressional funding for defence reveals about America’s
their Chinese competitors requires shed­
military priorities
ding older weapons platforms in favour of

A nyone who has observed Congress ov­

er the past decade will be familiar with
11th­hour, slapdash policymaking. The Na­
how the country should compete with its
Pacific rival divides both parties. Even as
America embarks on a new contest in Asia,
those at the cutting­edge, such as un­
manned ships. Lawmakers have long been
sceptical of this move to “divest to invest”,
tional Defence Authorisation Act (ndaa)— lawmakers do not agree with one another, in Pentagon jargon. Bryan Clark of the
the annual defence­policy bill and one of or with President Joe Biden, over how to Hudson Institute, a think­tank, suggests
the few routine, bipartisan pieces of legis­ address other pressing issues, most promi­ this scepticism is reasonable. “They feel
lation—has followed a familiar pattern. nently a revanchist Russia. Nor have they the military has gone down this road mul­
After months of delays in which one of the proved capable of either ending the war on tiple times of saying the next thing is so
largest budget categories, was pushed to terror or voting to continue it. much better, but then it never arrives.”
the back burner in favour of other Demo­ The current Congress’s free­spending Following that logic, Congress is hand­
cratic priorities, the Senate seemed to habits are bipartisan when it comes to se­ ing the Pentagon substantially more mon­
abandon efforts to pass the $768bn defence curity. Mr Biden’s proposed defence bud­ ey to buy proven designs and strengthen
bill (which includes $147bn to buy new get, released in May, entailed only a mod­ America’s presence in the Pacific. Besides
hardware) for the 2022 fiscal year. Leaders est increase, an attempt to placate doves on securing 13 new ships, including three Ar­
from both parties eventually compro­ his left flank. But the rest of the legislature leigh Burke­class destroyers and two Vir­
mised and the law passed the House this ginia­class submarines, the law would au­
week. Amid the scramble it was easy to thorise procurement of 347 aircraft, well
→ Also in this section
overlook what members of Congress think above the Pentagon’s initial request for
the mammoth defence budget should ac­ 24 Trump’s media SPAC 290. This builds on a clear preference for
tually be for. Following the money reveals the navy and air force dating to the end of
25 Funding for religious schools
where lawmakers think America’s defence the Obama administration, with spending
priorities lie. 25 Waiting for snow on the former growing by 62% since the
From a distance, the budget appears to 2015 fiscal year. That, paired with $7bn for
28 Sunset clauses and budgeting
be guided by a strengthening bipartisan the Pacific Deterrence Initiative, a fund to
consensus that America must confront 29 Housing vouchers bolster regional allies, is a measure of Con­
China and spend more to do so. Look clos­ gress’s interest in a robust military re­
30 Lexington: Arguing about statues
er, and disagreements abound. Exactly sponse to rising Chinese power in Asia.

012
 24 United States The Economist December 11th 2021

Beneath this consensus, however, lie operations but derided by the air force public offering. This offers firms picked by
disagreements. Increased defence spend­ brass as expensive and vulnerable in a spac bosses an easier path to going public.
ing is opposed by the progressive left and great­power conflict. Despite America’s It is important that the spac is indepen­
libertarian right, which favour diplomacy, withdrawal from Afghanistan and reduced dently created and chooses the firm, and
echoing the inclination toward restraint in footprint in the Middle East, Congress has not vice versa. A freshly minted spac boss
foreign policy that is finding wider pur­ kept funding for the army largely intact. ought to seek out the best possible firm it
chase in Washington (see briefing). The us Though a broad bipartisan group of sena­ can to usher into public markets. But a firm
Innovation and Competition Act, an in­ tors promoted a repeal of the redundant that seeks out or encourages the creation
dustrial­policy bill framed in anti­China 2002 Authorisation for the Use of Military of a spac for the purpose of taking it public
terms and championed by the Senate ma­ Force against Iraq, the measure was left is trying to pull off pure regulatory arbi­
jority leader, Chuck Schumer, was kept out. The bill also reaffirms the long­stand­ trage. This tends to irk regulators.
separate from the defence bill after opposi­ ing provision barring the president from There are two reasons to suspect that
tion from some Republicans, who spied a transferring Guantánamo detainees to Digital World and Trump Media may have
new form of corporate welfare. An effort to courts on the American mainland, ensur­ pre­arranged their merger. The first is just
prohibit trade in goods made from slave la­ ing the prison will remain open. how quickly it came to pass. Most spacs
bour in China’s Xinjiang region was met Despite, or perhaps because of, the hunt for months, sometimes more than a
with quiet resistance from the White broad support for defence spending, hun­ year, to find a target. Digital World raised
House and helped derail negotiations in dreds of amendments were offered in both $288m on September 8th and announced
the Senate, only to be left out of the com­ chambers of Congress, including many the merger with Trump Media six short
promise bill. with only a tangential relationship to de­ weeks later, on October 20th.
And while Congress is keen to spend fence. “It’s becoming a vehicle for every­ The second is that Patrick Orlando, now
money on new kit, members are less en­ one’s legislation,” says Mr Clark. After the boss of Digital World, was apparently
thusiastic about making the difficult deci­ passing the bill, Congress still needs to ap­ talking to Mr Trump’s representatives
sions necessary to rebalance the armed propriate the funds it has authorised in the about a deal as early as April, according to
forces and put them on a sound fiscal foot­ ndaa. The secretary of defence, Lloyd Aus­ the New York Times. In papers filed with the
ing. Seamus Daniels of the Centre for Stra­ tin, warned lawmakers in a public state­ sec on May 25th, Digital World said it had
tegic and International Studies, a think­ ment that a failure to do so promptly neither picked nor “initiated any substan­
tank, finds that personnel costs account would be catastrophic. Having run up a big tive discussions” with a merger target.
for nearly a third of the Pentagon’s budget, bill, Congress still has to settle it. n Around July, before Digital World’s fun­
a figure that keeps rising despite America draising, a Trump Media executive said the
fielding the fewest troops in decades. firm was in an “exclusive agreement” to
These obligations to current and retired The media merge with an unidentified spac.
warriors (who cost more due to health­care At the time Mr Orlando was the boss of
expenses) crowd out funds for new weap­ SPAC-handed numerous spacs. He could have been rep­
ons and research, but Congress is loath to resenting any one of them on the call with
tackle such a politically sensitive issue. Mr Trump’s representatives. And even if he
Even as lawmakers push funding towards did mislead investors in his regulatory fil­
new systems, they show little appetite to ings, they have hardly been shafted. Shares
WASHINGTO N, DC
give up on ageing ones, such as the Ticon­ in Digital World jumped from $10 to $109
Donald Trump’s media spac venture
deroga­class cruisers, creating an ongoing on news of the Trump Media deal (though
meets regulatory resistance
drain on scarce resources. “If Congress they have since traded between $40 and
were to let divestments happen, the air
force could acquire everything they want­
ed without increasing the budget at all,”
I t reads like the punchline to a joke.
What do you get if you cross Wall Street’s
new financial plaything with Donald
$70, which would value the merged firm at
about $5bn­10bn). Indeed, investors clam­
oured for more. On December 4th Digital
says Travis Sharp of the Centre for Strategic Trump’s attempt to launch a social media World raised a further $1bn from unnamed
and Budgetary Assessments. company? A Securities and Exchange Com­ institutional investors.
Though Mr Biden would like to concen­ mission investigation. That will be little comfort to regulators,
trate on China, Congress has other ideas. On December 6th Digital World Acqui­
While the president attempts to both reas­ sition Corp, the special purpose acquisi­
sure European allies and cool tensions tion company (spac) which struck a deal to
with Russia, lawmakers have taken a more merge with Trump Media & Technology
maximalist approach. The defence bill al­ Group, the media company founded by Mr
locates $4bn for European defence, as well Trump, revealed in a regulatory filing that
as $300m for Ukraine’s armed forces, both the sec, Wall Street’s main regulator, and
greater sums than the president requested. the Financial Industry Regulatory Authori­
While many legislators in both parties ty, an exchange watchdog, had made inqui­
have supported sanctions on firms affiliat­ ries into the firms’ dealings. At issue is
ed with Russia’s Nord Stream 2 pipeline, whether or not Digital World and Trump
Republicans proposed an amendment that Media had agreed to merge prior to Digital
would have overridden Mr Biden’s waiver World raising money from investors.
of current sanctions, forcing Democrats to A spac, also called a blank­cheque com­
take a difficult vote. The measure did not pany, is a special kind of financial vehicle.
make the final text. It is a shell company that raises money
Politics also complicates efforts to tack­ from investors by going public, and then
le the lingering costs of the war on terror. seeks out a private company to merge with.
The bill would require the air force to con­ There are fewer disclosure requirements
tinue acquisitions of the mq­9 Reaper, a for firms which end up public via merger,
drone platform used for counter­terrorism rather than making their debut via initial Truth HQ

012
 The Economist December 11th 2021 United States 25

who may intervene. Allowing spacs to be declining money for religious “use”—
created as vehicles for specific firms is a mandatory prayer, say—is another ques­
great way to create a backdoor that lets the tion, which Espinoza left open. Maine’s
flimsiest ones into public markets. Trump nonsectarian rule addresses the character
Media is a manifestation of that idea. The of curriculums, not whether schools have a
scant information on Trump Media’s web­ religious identity, the First Circuit found,
site leaves it unclear who, if anyone, is so did not violate the constitution.
working on building its social­media plat­ The families’ lawyer, Michael Bindas,
forms. The only product discussed is scoffed at this distinction. It is “baseless”
truth Social, seemingly a Trump­friendly and contrary to “common sense”, he told
version of Twitter. But the test version of the justices, to bar one type of bias while
the site is just a cut­and­paste of the open­ permitting another. Limiting tuition pay­
source code for Mastodon, another social­ ments to secular private schools is “dis­
media platform. The firm was apparently crimination based on religion”. A secular­
without a chief executive until December only rule violates the First Amendment’s
6th when Devin Nunes, a particularly bo­ guarantee of religious free­exercise.
vine member of Congress, announced he The six conservative justices signalled
would step down to run the firm. Caveat strong agreement. Many of their questions
emptor doesn’t really cover it. n for Mr Bindas were aimed at allaying fears
that striking down Maine’s policy will Another brick out of the wall
open state coffers to all manner of church
Religious schools funding. Imagine a state wants to pay for have afforded states some sway to avert
facility improvements at public and priv­ strife by avoiding entanglements with reli­
Following the ate schools, Chief Justice John Roberts gious institutions. “Other people won’t un­
asked, but tells sectarian schools the mon­ derstand”, Justice Kagan said, “why in the
money in Maine ey cannot be used to build a chapel. “Is that world their taxpayer dollars are going to
ok or not?” It’s probably fine, Mr Bindas re­ discriminatory schools.” Yet that seems to
plied. A state may have a compelling inter­ be what the court is about to require in
NEW YO RK
est in declining to give “direct institutional Maine and beyond. n
The Supreme Court is poised to poke a
aid” for a religious project.
new hole in the church-state divide
Justices Amy Coney Barrett and Brett
The climate
P arents seeking government money to
send their children to religious schools
have won a string of victories at America’s
Kavanaugh tried to degrease the slippery
slope, too. “You’re not arguing”, Justice Ka­
vanaugh asked, “that the mere funding of Man it does show
Supreme Court. The dollars began flowing public schools would entitle the parents to
in 2002, when the justices let states pro­ funding for religious schools”, right? “That signs of stopping
vide parents with vouchers for religious is correct,” Mr Bindas replied. “We are not
schooling. In 2017 the court said states may arguing that there is a constitutional right DE NVE R
not exclude church­based preschools from to a publicly funded religious education, Late snowfall in the West is part of a
grants for playground resurfacing. And in nor could we.” The right to equal access to pattern, increasing the risk of drought
2020, in Espinoza v Montana Department of state support kicks in only when a state de­
Revenue, parents persuaded the high court
that their state must provide tuition assis­
tance for students to attend religious
cides to fund private schools.
As in recent oral arguments on abortion
and the right to bear arms, the three liberal
E very december residents of Denver,
Colorado hang holiday lights and deco­
rate trees—and the occasional cactus—in
schools if they also offer these funds for justices were outnumbered. They tussled their front yards. But this year one thing is
secular private schools. with Mr Bindas on several points. Justice missing from the festive picture: snow. As
On December 8th the justices contem­ Elena Kagan pressed a question of stand­ of December 8th, Denverites had yet to see
plated taking another brick out of the “wall ing: since the schools involved have not any snow land on their yellowing lawns,
of separation between church and state”— said they will accept students who use making it the latest first snowfall since re­
Thomas Jefferson’s spin on the First state money, do the parents even have the cords began in 1882. And Colorado’s capital
Amendment’s bar on laws “respecting an legal right to sue? And Justices Kagan, Ste­ is not alone, for the white stuff is scarce
establishment of religion”. The case, Car- phen Breyer and Sonia Sotomayor chal­ this year across the American West. A new
son v Makin, is a challenge from parents lenged Mr Bindas’s framing of the case. study suggests future winters might not
who say Maine is violating their religious Maine’s policy serves “a very small number bring much either.
liberty. About half of Maine’s school dis­ of students living in isolated areas”, Justice The snow that builds up in mountain
tricts have too few students to support a Kagan noted. The benefit, Justice Soto­ ranges over the winter, called snowpack, is
high school. The fix is a programme where­ mayor said, is “a free public secular educa­ a natural reservoir. In the spring, when it
by students attend public schools in other tion”. All parents have the right to pay to melts, its waters replenish rivers, man­
districts or, using state funds, opt for priv­ send their child to a religious school but made reservoirs and soil. The amount of
ate schools. But there is a catch: Maine’s why, Justice Kagan asked, “does the state water that makes it into reservoirs each
money may go only to schools whose cur­ …have to subsidise the exercise of a right?” year depends on temperatures, evapora­
riculums are “nonsectarian”. Carson reignites a debate over what re­ tion and run­off, or how much soaks into
Last year the First Circuit Court of Ap­ mains of Jefferson’s wall of separation. The the ground. But warmer winters in the
peals upheld Maine’s policy, citing a dis­ partition no longer means, as the court western states, one consequence of cli­
tinction in the Espinoza decision. That rul­ held in 1947, that “no tax in any amount, mate change, have led to a decline in aver­
ing said it is unconstitutional to rope reli­ large or small, can be levied to support any age snowpack. One study published in 2018
gious schools out of state benefits based on religious activities or institutions, whatev­ found that annual snowpack in the region
their “status”, or religious affiliation. But er they may be called.” More recent rulings had decreased by 15­30% since 1915.

012
 METHOD

012
 MADNESS

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012
 28 United States The Economist December 11th 2021

The future looks bleaker still. A new pa­ Budgetary gymnastics

per by researchers at the Lawrence Berke­
ley National Laboratory in California House of the
found that mountain snowpack in the
West could decline by an average of 25% by rising sunset
2050. The rate varies across four mountain
ranges studied. The Sierras and the Cas­
WASHINGTO N, DC
cades could see a 45% decline in snowpack
The Democrats exploit a loophole to
by mid­century, compared with 20­30%
mask the cost of Joe Biden’s big bill
declines for the Rockies and the Wasatch/
Uinta. So a snowless future seems more
imminent in California and the Pacific
Northwest than further inland.
I n the 1970s American scholars alighted
on an idea to prevent government
sprawl. Sunset legislation, as it was called,
The West has had bouts of “snow would have an expiry date, upon which
drought” before. But they look set to be­ politicians could decide whether to renew
come more common. Researchers suggest it. In theory, useless laws would vanish. In
that California could experience persistent practice, sunsets have morphed into a leg­
“low­to­no snow” by the 2050s with the islative device that serves almost the exact
Rocky Mountain states following in the opposite purpose: a way to mask policy
2070s. Many places are already preparing costs. The Build Back Better bill, Joe Biden’s Sinset Blvd, DC
for a drier future. California’s Department signature social­spending package, is the
of Water Resources recently warned that latest and most egregious case. template with his tax cuts in 2017. Those
next year the State Water Project, a storage The headline cost of the bill, which crafting the sunsets hope that when expiry
and delivery system that runs through the passed the House on November 19th but arrives, the measures will be popular
middle of the state, will initially only pro­ faces a bumpy path in the Senate, is rough­ enough that lawmakers will keep them.
vide water for “health and safety” needs. ly $2trn over a decade. That is less than 1% There is precedent for this. The vast major­
Arizona is readying for cuts to its allotment of gdp per year, which may not sound like ity of Mr Bush’s tax cuts were indeed made
of the Colorado River, which supplies wa­ much. However, ample use of sunsets permanent under Barack Obama.
ter to 40m people across the south­west. n means the real cost could be twice as large. In the case of Build Back Better, the
The Committee for a Responsible Federal Democrats are using sunsets in the hopes
Budget, a nonpartisan organisation, thinks of bridging an intra­party split. Joe Man­
Cascade it would cost $4.8trn if all temporary mea­ chin and Kyrsten Sinema, senators from
Snowpack loss across the western United States* sures (expensive family­related policies in West Virginia and Arizona, respectively,
% decrease the main) were extended. whose votes are needed for the bill to pass,
0 Longer­term implications would be both balked at an initial $3.5trn proposal as
Median ↓ More loss
starker. The White House says that Build too expensive. Rather than jettison some
-20 Back Better will not add to America’s debt. of their cherished plans, their fellow
By contrast, the Penn Wharton Budget Democrats scaled back their duration,
Model, an academic initiative, calculates it crossing their fingers that, once on the
-40
would raise debts by 25% by 2050 if sunsets books, they will ultimately be extended.
are made permanent. Such precise projec­ Yet in the process, they have created a
-60 tions should be taken with a pinch of salt. jumble of expiry dates. Tax credits for low­
But the message is clear: Build Back Better income workers and children would last
-80
is likely to cost far more than advertised. for just one year. A top­up for health insur­
For Democrats today, as for previous ance would run for four, while funding for
2025-49 2050-74 2075-99
Republican administrations, that is the child care and pre­kindergarten would for
Forecasts
point. By setting early expirations, they are six. The fiscal ramifications only get more
Mountain ranges putting a cap on the costs that are assessed complicated because Mr Trump’s eight­
by the Congressional Budget Office (cbo), a year sunsets enacted in 2017 would overlap
non­partisan agency which is a crucial with the new ones, says Kent Smetters of
R
ES

scorekeeper. The cbo only assesses what is Penn Wharton. The expiration of a Trump­
O

Montana
AD

in bills as written. So, for example, the era child tax credit would nearly double the
KY
SC

child tax credit, a payment to families with annual cost of Mr Biden’s version.
M
CA

young children, would cost $190bn in the Another concern is what the sunsets
UN

Oregon Idaho Wyoming one year that it is slated to last in the Build cover. Applying expiry dates to pieces of
TA

Back Better bill. Were it to become perma­ the tax code is bad enough, sowing uncer­
IN

nent—the objective of progressive Demo­ tainty in the economy. In Build Back Better,
S
SI

W A S AT C H / Denver
Nevada crats—its cost could rocket to more than entire programmes will be at stake. “With
ER

U I N TA
$1trn over the next decade. universal pre­kindergarten, you’re finding
RA

Utah Colorado
Why bother with the budgetary tricks if buildings, hiring teachers and enrolling
N

California
fornia
EV

they are so transparent? For the George W. families. And then with sunset provisions,
A

Colorado
D

Bush, the first president to make extensive the federal funding may just go away,” says
A

Arizona New Mexico use of sunsets, the idea was to make sure Lori Esposito Murray of the Committee for
500 km
that his tax cuts complied with a Senate Economic Development of the Conference
*If greenhouse-gas emissions continue rule against increasing deficits beyond a Board, a public­policy organisation. Sun­
along the high-emissions scenario ten­year window. Setting the expiry date sets may seem a clever way to get pet pro­
Source: Nature Reviews Earth & Environment,
Lawrence Berkeley National Laboratory
just before the ten­year mark was a loop­ grammes through a divided congress. But
hole. Donald Trump followed a similar they are also setting them up for failure. n

012
 The Economist December 11th 2021 United States 29

Housing The biggest barrier to using a voucher

may be the outsize role that landlords play
To rent or not to rent in choosing whom to rent to. Eva Rosen, of
the McCourt School of Public Policy at
Georgetown University, says landlords ex­
ist on a spectrum. On one end, there are
property­owners in poor neighbourhoods
D E NVE R
who seek out voucher­holders because
How landlords thwart America’s attempts to house poor people they like the security of knowing that the
government will pay some of their tenants’

“W hy the fuck does this county even

offer Section 8 if it’s a mythical un­
icorn that nobody ever gets?” asks Alex, the
poor families move to wealthier, safer
neighbourhoods. Many researchers view
them as a way to increase social mobility.
rent each month. On the other side are
landlords who refuse to rent to families
with vouchers because they don’t want to
main character in Netflix’s new series But not everyone wins the lottery. Many deal with the paperwork and extra inspec­
“Maid”. The show, based on Stephanie cities have had to close their waiting lists. tions that come with the subsidy—or be­
Land’s book “Maid: Hard Work, Low Pay, A new study from the Housing Initiative at cause of outright discrimination.
and a Mother’s Will to Survive”, is a portrait Penn, a research outfit at the University of A study published in 2018 by research­
of poverty and domestic work in Washing­ Pennsylvania, estimates that 10.4m house­ ers at the Urban Institute, a think­tank,
ton State. Section 8, now known as the holds would be eligible for a voucher under documents just how hard it is for voucher­
Housing Choice Voucher Programme hud’s criteria, four times as many families holders to sign a lease. Researchers
(hcvp), is a federal housing­assistance as there are vouchers for. By comparing the screened 341,000 rental advertisements
scheme that subsidises rent for 2.3m poor gap between existing and needed vouchers and called landlords in five cities over 16
American households lucky enough to get with local renter populations, researchers months. The authors found that they had
their hands on a voucher. Others can spend found that Orlando, Charlotte and Phoenix to look at 39 adverts, on average, to find one
years on waiting lists, hoping to be chosen. would benefit most from a policy where potential home. When they called land­
Housing­policy wonks often refer to vouchers were given to all who qualify. lords to check whether they would accept a
the voucher programme as a kind of lot­ When the Democrats unveiled their housing voucher, more than 75% of prop­
tery: win and your life may fundamentally mammoth $3.5trn Build Back Better bill, it erty­owners in Fort Worth and Los Angeles
change. When towering public­housing included $75bn for housing vouchers. In immediately declined. Denial rates were
projects were demolished in the 1990s, the the version that the House of Representa­ lower in Newark (31%) and Washington, dc
Department of Housing and Urban Devel­ tives passed in November, that was win­ (15%), in part because both cities have laws
opment (hud) used vouchers as a way to nowed to about 300,000 new vouchers protecting families with vouchers from
house America’s poor through the private costing $24bn. Yet receiving a voucher and discrimination. Los Angeles passed such a
market. With a voucher, tenants put 30% of successfully leasing a unit with it are two law after the study was published.
their monthly income towards rent and very different things. The Penn researchers It is not yet clear how the covid­19 pan­
the federal government covers the rest. found that only about one in five house­ demic has affected the hcvp. Stefanie De­
Many people on voucher waiting lists are holds who were eligible for a voucher suc­ Luca of Johns Hopkins University says ex­
homeless or living with their families. cessfully obtained and used one in 2019. It tra rental assistance might have helped
Nearly half of all voucher­holders are is tricky to find a home to rent at all in a some small landlords struggling with their
black, 70% are racial minorities and about tight market. But poor renters face extra mortgages. For others, the lengthy eviction
a third earn less than $10,000 a year. barriers. The hcvp only gives voucher­ moratoriums may have eroded trust be­
Vouchers are not just about housing: holders two months to sign a lease before tween property­owners and the govern­
cheaper rent means more money for ex­ they need an extension; security deposits ment. While the Democrats’ Build Back
penses such as food, bills or school. Be­ can be pricey; and voucher­holders may Better bill focuses on increasing the num­
cause vouchers theoretically allow tenants not have access to a car or a computer to ber of vouchers, it also includes $230m in
to rent a home anywhere, they can help help with their search. incentive programmes to entice more
landlords to accept them.
Other adjustments could make the pro­
gramme more effective. The maximum
amount of money a landlord can get from
the government is based on the average
rent for an entire metropolitan area. Some
landlords in poor neighbourhoods covet
voucher­holders because they can charge
much more for a unit than it would other­
wise fetch. Ms Rosen argues that switching
to a system where maximum rent varies by
zip code will shut down such predatory
tactics. And no federal law exists protect­
ing voucher­holders from discrimination.
Only 15 states and Washington, dc, can
boast of such a measure. Several cities have
followed suit. Still, landlords can skirt
around these protections by failing inspec­
tions or setting rent just above market
rates. “No one has paid any attention to
landlords since the 1970s,” says Ms DeLuca.
Section 8, season eight It might be time to start. n

012
 30 United States The Economist December 11th 2021

Lexington Stone-cold killer

Why the arguments over statues matter more than the statues themselves
archaeologists are still piecing together. That period in the Con-
necticut River Valley was a time of precarity, terror and shifting
alliances among natives and English and Dutch settlers. The Pe-
quots had recently besieged settlers in Saybrook, killing and
wounding 20, and then attacked the village of Wethersfield, kill-
ing nine men and two women and abducting two girls. At the time
there were maybe 250 able-bodied Englishmen in all Connecticut.
Mason’s 76 soldiers were backed up by some 300 allies from the
Narragansett and Mohegan tribes, who were eager to expel the
dominant Pequots from the region.
“We were wholly unprepared for the brutality that ensued,”
Marilyn Malerba, chief of the Mohegan Tribe, told the commis-
sion, while arguing for the statue’s removal. “It was not our form
of conflict.” She spoke, like others, as though the battle happened
just a few years ago. Listening to the speakers, including a descen-
dant of Mason out to defend the family name, it was easy to under-
stand the observation of Kevin McBride, an anthropologist, that
“the Pequot war is still being fought in many communities.”
Walter Woodward, the state historian, argued that if the statue
stayed in place it could serve not to celebrate but to educate, about
the real nature of history and its actors. Connecticut’s past, he
said, “is filled with injustice, pain, inequity and violence”. He not-

A country whose national representatives can scarcely agree

to pay the government’s salaries or cover its debts is a poor
candidate for exploring how to tell its national story. And America
ed that while past legislators had placed a dozen statues of early
leaders in the capitol’s alcoves, they had long since stopped trying
to tell Connecticut’s story, leaving eight alcoves vacant. Why not
is not failing to disappoint. At the national level, the debates over provide a truer, grittier account, “rather than continue to think
American history are as unsatisfying as the other culture wars be- that we’re going to make the state capitol a multi-century cathe-
tween leftist inquisitors and Trumpist berserkers, who thrill to dral of secular saints?”
each other’s excesses while exhausting everyone else. Built in the 1870s, the capitol, with its kaleidoscopic interior, is
The struggle is more edifying at the local level. There, the de- more like a cathedral crossed with a genie’s lamp. It is a monu-
bates are not about broad-brush claims of lionising bigotry or ment itself, not just to democracy but to an exuberant era when
erasing history—not, in other words, about abstract representa- not only settler cruelty but also Yankee ingenuity made Hartford
tions of representations—but about the bronze or stone symbols wealthy and cultured, a city that counted Mark Twain among its
themselves. Should that statue in the town square stay or go? One residents and Charles Dickens among its visitors. The Colt Armou-
such debate is under way in Hartford, Connecticut, over the mar- ry, which churned-out patented revolvers, was for a while the larg-
ble statue of an Englishman that has glowered from the north fa- est private weapons manufacturer in the world.
çade of the state capitol for more than 100 years.
In the 17th century, John Mason was a deputy governor and act- The Mason line
ing governor of Connecticut who helped write the charter giving Hartford, like much of Connecticut, is more ragged today. Yet the
the colony unusual autonomy from the British crown. But he be- pride of the speakers in their state was refreshing and not without
came a hero to the first settlers and their descendants as a soldier, grounds, including the success of some native tribes. The day be-
in what is known as the Pequot war. One history from the middle fore the hearing, Mr Butler announced the opening of the Mashan-
of the last century, for example, credits Mason with saving the em- tucket Pequots’ latest casino, in Puerto Rico; several days later, the
bryonic colony from extinction by “the Red Threat”. “The Pequot Mohegans completed a $1.55bn round of financing for the resort
menace was removed from the valley for ever,” it reads, in an ac- they are building on Yeongjong island in Incheon, South Korea.
count typical of the victors. There is a lot to celebrate as well as to dispute, as there always is. It
Mason accomplished this through an atrocity: on May 26th is high time for the people of Connecticut and other states to also
1637, he led soldiers in setting fire to a Pequot fort and then killing start disagreeing about what statues they should be creating.
the more than 400 people inside, whether warrior, woman or This is not the first time Americans have argued over their
child. It was a decisive moment in entrenching the English colo- symbols; it is not even the first time the people of Connecticut
nists and in setting a standard for their treatment of natives. On have argued over a John Mason statue. They tend to have these dis-
the capitol, Mason is depicted in battle dress, sword in hand. putes once a generation, then forget again. The forgetting is the
“There is no doubt Mason engaged in what we now call geno- problem. The American mind, wrote Henry Adams, a historian,
cide,” Rodney Butler, the tribal chairman of the Mashantucket Pe- “stands alone in history for its ignorance of the past”. Whether a
quot Tribal Nation, said last month, in a recorded message, during given statue stays or goes, a continuing argument among citizens
a hearing of the state commission that is supposed to recommend would be the best representation of American striving. Without
the statue’s fate on December 14th. “I ask you, is this a man we that, the statues will just fall mute again. As Daniel Menihan ju-
should celebrate in this great state of Connecticut?” nior, another leader of the Mashantucket Pequots, put it, the Ma-
There is no moral way to answer yes, even if the thumbnail de- son statue “has been there for a very long time, and it hasn’t edu-
scription of the attack oversimplifies matters that historians and cated many people at all”. n

012
 The Americas The Economist December 11th 2021 31

Climate change outstrip supply by some 240,000 tonnes.

The lithium market is highly speculative;
A salt and batteries past predictions of shortages have proven
wrong, in part because people were slow to
start buying electric cars. But the idea that
sooner or later plug-in wheels will go
mainstream has led to renewed interest in
Bolivia. It has 21m tonnes of resources, ac-
RÍO GRANDE
cording to the us Geological Survey. If it
How Bolivian lithium could help save the world
could extract more of them, it would no-

T he salar de uyuni, a salt flat in south-

ern Bolivia, is so vast and so white you
can see it from the moon. It spans 10,000
just 600 tonnes of lithium carbonate this
year, generating less than $5m in sales (see
chart on next page). By contrast Chile and
ticeably increase the global supply.
It helps that, after nearly two years of
political instability and an economic cri-
km2 (4,000 square miles), roughly the area Argentina are expected to produce 134,000 sis, Bolivia has had a more business-
of Kosovo. The top layer consists of salt and 36,000 tonnes this year, respectively. friendly president since 2020. Luis Arce, a
hexagons, thick enough to withstand the “We’re still waiting for the boom,” says Co- former finance minister, has signalled that
weight of Jeeps and igloo-like buildings rina Alí Lupa, a union leader in Río Grande. he may be more open than his predeces-
made of blocks of salt. Underneath, a layer sors were to letting foreign firms dig for
of brine holds the world’s largest deposits Still dreaming minerals in exchange for their know-how,
of lithium, a light and volatile metal used Indeed, after years of unmet targets and financing and access to global markets.
in batteries for smartphones, computers cancelled deals, lithium experts nearly During his campaign, Mr Arce hired
and electric vehicles. gave up on Bolivia. But recent pledges by Benchmark to help him develop a lithium
Such staples of modernity are scarce in carmakers such as General Motors and plan. In April the government called for
the countryside around the Salar. Río Gran- Ford, along with countries such as Britain bids to help it develop a new technology
de, a dusty village founded by quinoa farm- and South Korea, to increase production of called “direct lithium extraction” (dle). In
ers and llama herders, sits near its south- electric vehicles have led to a new scramble July it announced that nine companies
ern edge, 25km from a pilot plant for lithi- for the minerals used to make them, says would begin pilot tests in the Salar. All this
um carbonate (a processed form of the Simon Moores of Benchmark Mineral In- could help the country turn a corner in its
metal) that opened in 2013. Over the past telligence, a consultancy. quest to industrialise lithium.
decade, the village’s 2,000 or so residents Demand for lithium doubled between In many ways, extracting lithium in Bo-
have invested in lorries to serve the plant 2015 and 2020 to around 360,000 tonnes livia is harder than in other countries. As
and built simple hotels for workers they per year. Benchmark predicts it will soon in Argentina and Chile, Bolivia uses solar
expect to flock to the area any day now. evaporation to extract the metal. The pro-
But although Chile has been extracting cess consists of digging a series of huge
lithium since the 1980s and Argentina is → Also in this section pools, the biggest of which has a surface
set to rival its production by the end of the area of 30 hectares. As the lithium-rich
34 Bello: Colombia’s centrist chance
decade, Bolivia’s pilot plant will produce brine is transferred from one pool to the

012
 32 The Americas The Economist December 11th 2021

next, evaporation helps isolate different teries) from the brine left over after the
salts. But according to Renan Soruco, a evaporation process. Bolivia would control
chemist at the Tomás Frías Autonomous 51% of the company. aci also agreed to help
University in Potosí, “every brine is un­ build an industrial­scale battery plant.
ique.” And Bolivian brine has proved espe­ Some aspects of the contract struck ma­
cially tricky thanks to its high level of mag­ ny as unfair. It was to last 70 years, a long
nesium (around 17 parts to every one of time for technology that is still experimen­
lithium, compared with 4:1 in Chile’s purer tal. Bolivia had preferential rights to just
brine). Bolivia’s rainy season also slows 17% of the lithium hydroxide produced. All
down evaporation. The Uyuni plant is able sales in Europe would be handled by the
to extract only 15­20% of the lithium in its joint firm, which meant that ylb could not
brine, says David Rocha, the plant’s direc­ negotiate its own deals and, if it failed to
tor. Chile’s efficiency rate is around 40%. provide enough residual brine, aci could
But a bigger problem is political. In sell some of its lithium carbonate. Activists
Chile two multinationals, sqm and Albe­ in Potosí, the region in which the Salar salt
marle, hold licences to extract lithium. Ar­ flat is located, demanded higher royalties.
gentina’s 24 provinces are free to grant “The government was deceiving the popu­
concessions (although only three have lation,” says Marco Pumari, who carried
lithium projects); the latest went to Urani­ out a week­long hunger strike in October
um One, a subsidiary of Russia’s state nuc­ 2019 against the deal. (The deal with aci
lear company. Bolivia, by contrast, is still was eventually cancelled.)
dominated by Yacimientos de Litio Bolivi­ Mr Morales was ousted in November From two, to thousands
anos (ylb), the state lithium company, 2019, after country­wide protests against
which controls all of the extraction and an election perceived to be fraudulent. to test its consistency; another consists of
processing at the Salar. Lithium extraction was neglected under two people rotating a huge metal tin of
Protectionism in Bolivia, always the inexperienced interim government of near­final product in front of a heater.
strong, grew more so under Evo Morales, a President Jeanine Áñez, while covid­19 im­ “We’re still stumbling a bit,” admits Mr
socialist who was president from 2006 to posed further delays on production. The Rocha, the director. He says he is under “a
2019. Soon after Mr Morales took office, he ylb has had six presidents in the past two lot of pressure” to open the industrial­
renegotiated natural­gas contracts with years. Juan Carlos Zuleta, a Bolivian lithi­ sized plant next year. It currently consists
foreign firms and instructed Mr Arce, then um expert, was fired three weeks after get­ of little more than a steel shell. Experts
his finance minister, to design an econom­ ting the top job in 2020 because of protests warn that moving from small­scale to in­
ic policy to redistribute profits. A new con­ by Río Grande residents, who believed ru­ dustrial production will require the
stitution in 2009 expanded state control mours that his consulting work for the development of new processes and the
over natural resources. The previous year, Chilean government meant that he was purchase of new machines. According to
a plan to industrialise lithium mandated acting for Chile. “A country that is con­ Benchmark, lithium factories take seven
that the state oversee 100% of extraction, stantly in conflict can’t develop,” he sighs. years on average to reach full capacity.
with foreign partners allowed in only at A lot of hope is riding on the tender for
later stages. It looks like the future dle. This method is quicker than solar
Another problem is that some of the This chequered past is visible in the pre­ evaporation and less water­intensive. That
deals Mr Morales was willing to strike with sent. At the ylb plant on a recent weekday should make it more palatable to the peo­
foreign firms have been unpopular with at dawn, the smell of eggs wafted out of a ple around the Salar, whose farms are al­
activists. In 2018 the government hired turquoise pool, a sign of evaporating sul­ ready suffering from climate change.
Maison Engineering and cmec, two Chi­ phates. Only 96 of 160 pools are currently Franklin Molina Ortiz, the minister for en­
nese firms, to build an industrial­size lithi­ in use; some are under repair, while others ergy, says that in the short term, Bolivia
um carbonate plant with a capacity to pro­ are empty due to a shortage of industrial­ will pursue a hybrid strategy that will use
duce 15,000 tonnes each year. It also signed sized pumps for brine. Eight years after it both the evaporation plant and new dle
a deal with aci Systems, a German firm, for opened, the lithium­carbonate pilot plant methods. But some are sceptical of a gov­
a joint venture to manufacture lithium hy­ is still artisanal: one step requires a worker ernment plan, published earlier this year,
droxide (another compound used in bat­ to pinch white powder between his fingers that says the country will produce some
81,000 tonnes of lithium by 2025, 90% of
which will come from dle, a relatively un­
All potential, no action tested technology. “This is impossible,”
Lithium says Mr Zuleta.
Yet only a decade ago people thought it
Resources*, megatonnes, 2021 Production, kilotonnes of LCE† unlikely that electric cars would become
200 popular, notes Thea Riofrancos, a political
0 5 10 15 20 25 scientist who focuses on resource extrac­
Argentina FORECAST
Bolivia tion at Providence College in Rhode Island.
150
Argentina Chile
Demand for lithium is now so strong that
Chile Bolivia
100 Bolivia could make a big business out of
United States extracting it, even if it puts nationalism be­
Australia 50 fore efficiency.
China
Correction: Last week in “A leftward turn” we wrote
DRC 0 that Xiomara Castro would be Central America’s
Canada 2015 17 19 21 23 25 first female president. That honour belongs to
Sources: USGS; Benchmark Mineral Intelligence *Including deposits currently uneconomical to extract †Lithium carbonate equivalent Violeta Chamorro of Nicaragua. Ms Castro will be
first in the Northern Triangle. Sorry.

012
012
 34 The Americas The Economist December 11th 2021

Industrial­scale battery production is markets until at least 2030, when dle will with some public consultation. This might
much harder to imagine, for reasons large­ be better developed. set out rules for foreign involvement in ex­
ly beyond the government’s control. Boliv­ Convincing Bolivia’s powerful campesi- traction, which is currently banned, and
ia is landlocked and has terrible roads. It no (peasant farmer) groups and unions to change the royalty structure.
would have to import many components back a project also remains a challenge. Ms Alí, the union leader, reckons that
and exporting the batteries would be cost­ Earlier this month mayors from around the local mistrust of foreign investors is wan­
ly, even hazardous. A better option, though Salar travelled to Germany to meet private ing. Most residents support Mr Arce, she
currently far­fetched, would be for South companies interested in Bolivian lithium. thinks. They hope that ramped­up produc­
America to develop regional electric­vehi­ This pleased residents of Río Grande, but tion at the plant will boost infrastructure.
cle supply chains, which might perhaps in­ irritated civic leaders in Potosí, who say Eventually, perhaps, a local university will
clude Bolivian batteries. they have been excluded from the govern­ open with degrees in science and technol­
Much will depend on demand in the ment’s lithium plans. ogy, that will in turn lead to more skilled
medium term. Benchmark does not expect It would help if a new law were drafted jobs. For now, she admits, these are
large quantities of Bolivian lithium to hit to regulate the lithium industry, possibly dreams. “But we haven’t given up hope.” n

Bello Between hope and experience

The political centre has a chance of winning in Colombia

S everal recent elections in Latin

America have seen the collapse, or at
least the defeat, of the moderate centre. It
was shaken by weeks of strikes and some­
times violent protests earlier this year.
With no serious rivals on the hard left, Mr
election, may or may not join them. But
he is a weaker candidate than Mr Duque
was. Miguel Silva, a political consultant,
was true of Chile’s presidential election Petro has spent the past four years cam­ reckons around 14m Colombians will
last month, of Peru’s earlier this year and paigning. A former senator and an undis­ choose to vote in one of the simulta­
of those in Brazil and Colombia in 2018. tinguished mayor of Bogotá, “he has very neous primaries and expects these to be
Will it be true of the next big election in simplistic ideas but he works politically divided roughly equally between hard­
the region, in Colombia in May? There very, very hard,” says Malcolm Deas, a left, centre­right and centre­left. That
are reasons to think that, in this case, a British historian of Colombia. Several could change the momentum of the race.
victory for the centre would not just be opportunistic political hustlers of the The run­off is thus likely to pit Mr
especially beneficial, but also that it right have declared their support for his Petro against a candidate either of the
might come about. candidacy because they think he will win. centre­right or centre­left. This time the
That is not the conventional forecast. But it is early days. According to the peace agreement is unlikely to be a big
Many analysts believe that next year’s Invamer poll’s fine print, 43% of respon­ issue. “Colombians hate the farc but
contest will be a repeat, in reverse, of the dents have yet to declare a preference. Mr they like peace,” says Mr Deas. “They
previous one. In a run­off in 2018 Iván Petro still scares many middle­class vot­ want a new political agenda.” That could
Duque, a protégé of Álvaro Uribe, a for­ ers. The centre looks more organised than involve security against criminal gangs,
mer president of the populist right, in 2018. Mr Fajardo and five other candi­ better public education and a return to
defeated Gustavo Petro, a populist of the dates of the centre­left have formed a economic growth (something Mr Petro’s
left, by 56% to 44%. In a poll of voting “Coalition of Hope” and agreed to face protectionism and his opposition to
intentions by Invamer, published this each other in a primary in conjunction mining and oil are unlikely to achieve).
week, Mr Petro is way out in front with with the legislative election in March. On So the centre has an opportunity. To
42%, ahead of Sergio Fajardo of the cen­ the centre­right the “Coalition of Experi­ seize it requires not just a clear pro­
tre­left (with 19%) and a host of also­rans. ence” unites five presidential hopefuls, gramme but a break with the unpopular
Mr Petro would easily defeat any oppo­ including several former mayors, in a status quo and connecting emotionally
nent in a run­off, the pollster thinks. similar primary. Mr Uribe’s nominee, with Colombians. Mr Uribe mobilised
Mr Duque won in 2018 because of fear Óscar Iván Zuluaga, who lost the 2014 fear of the guerrillas; Mr Petro channels
of Mr Petro, a former guerrilla who was a the kind of rage against the establish­
fan of Hugo Chávez in Venezuela. But he ment that was expressed in the protests.
also benefited from Mr Uribe’s campaign In a recent book Mauricio García
against a peace agreement in 2016 that Villegas, a Colombian political philoso­
ended half a century of war between the pher, argues that his country’s long
state and the farc guerrillas. The centre history of armed conflict has been driven
was identified with the accord, which by a political culture which exalted tribal
many Colombians thought too lenient. It emotions, of nation, party, class and
was hurt, too, by a failure to unite behind religion, which turned adversaries into
a single candidate. That allowed Mr Petro enemies and in which “we tend to dis­
to pip Mr Fajardo, an academic and in­ qualify too easily those who think differ­
novative former mayor of Medellín, by ently.” In Colombia, he concludes, “the
just 250,000 votes (out of more than 19m) real contrast is not between the radicals
to reach the run­off. of each extreme…but between these and
This time Mr Petro looks stronger the moderates.” To prevail, the centre
than in 2018. Mr Uribe is not the force he will have to tap into more peaceful emo­
once was. Mr Duque’s government has tions—of unity, solidarity and hope for a
been mediocre and is unpopular, and better future.

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 Asia The Economist December 11th 2021 35

Drugs in South-East Asia ary, especially the last few months,” says
Mr Douglas. “It’s pretty clear the post­coup
On a high breakdown in governance and security in
drug­production areas has had an impact.”
Cartels sell their product as far afield as
Japan and Australia, where richer consum­
ers can afford to pay a premium. But they
are increasingly targeting customers clos­
BANGKOK
er to home, too, where the population
Cartels are flooding the region with methamphetamine
dwarfs that of Asia’s richest countries. Syn­

O ctober was a stellar month for the Lao

police. On the 27th an officer in Bokeo,
a northern province, waved down a truck
And recorded seizures are likely to be just
the tip of the iceberg.
Most such hauls occur in Indochina.
dicates appear to have tailored their busi­
ness model accordingly. Over the past de­
cade the price of meth has plummeted
packed with Lao Brewery beer crates. Con­ Even though it is home to just 10% of the across the region. That suggests that
tained inside them were 55.6m metham­ population of East and South­East Asia, it whereas once cartels tried to maintain
phetamine pills and over 1.5 tonnes of crys­ accounts for nearly three­quarters of the prices at a certain point, now their strategy
tal meth, a more potent version of the drug. meth detected in the region. The meth labs is to flood the region and build up sales by
It was Asia’s largest drug bust ever, accord­ that feed Asia’s habit are found in Shan increasing levels of drug use.
ing to the un. Just the week before, the po­ state, a lawless patch of eastern Myanmar. The strategy of jacking up demand by
lice had seized 16m amphetamine tablets Even before Myanmar’s military coup in increasing supply seems to work. Data are
during two operations in the same area. February, it was a big centre of meth pro­ sketchy—few people will admit to being a
Law­enforcement agencies in South­ duction. But the putsch has distracted al­ drug user or addict—but suggest there is
East Asia have grown accustomed to break­ ready negligent authorities, making the enormous appetite for meth. In 2019, ac­
ing records. In almost every year between area even more enticing to drug cartels. In cording to unodc numbers, 0.61% of East
2011 and 2020, the authorities seized more neighbouring countries, seizures this year and South­East Asians aged between 15 and
meth, as the drug is commonly known, are once again breaking records—six times 64 used amphetamine­like substances, in­
than they had the year before. Between more meth has been seized in Laos in 2021 cluding meth, at least once a year, com­
2015 and 2019, the only other region to im­ than in 2020. “It’s been a mess since Febru­ pared with a global average of 0.54%.
pound as much of the stuff as East and That translates to 10m people, making it
South­East Asia (which the un groups to­ the biggest market for meth in the world.
→ Also in this section
gether) was North America—though the Recent household surveys show that
overall volume of drugs flowing through 36 Rohingya refugees take on Facebook roughly 1m people in each of Indonesia,
Asia is probably greater, because authori­ the Philippines and Thailand tried meth at
37 Unhelpful husbands in North Korea
ties there are more corrupt and less well­ least once in the past year. Between 2016
equipped to intercept traffickers, says Jere­ 37 India’s defence chief is killed and 2019, the number of people who used
my Douglas of the United Nations Office on meth at least once annually grew eight­
38 Banyan: Myanmar’s opposition
Drugs and Crime (unodc), an un agency. fold in Vietnam and ten­fold in Thailand.

012
 36 Asia The Economist December 11th 2021

In 2019 the un reckoned that the regional cide and aids. (Meth users tend to have seeking “at least” $150bn in compensation
market was worth $60bn. higher rates of sexually transmitted dis­ for “wrongful death, personal injury, pain
Meth appeals to users for several rea­ eases.) Apinun Aramrattana, a professor of and suffering, emotional distress and loss
sons. It is often the easiest drug to get— medicine at Chiang Mai University in Thai­ of property”. Although American internet
there is very little cocaine in the region— land, says that the country’s “meth epi­ companies typically are shielded from li­
and is in plentiful supply. Suchart (not his demic” is fuelling growing rates of mental ability for content that is disseminated
real name), a Thai user, says that meth is illness. Hospitals, he says, have struggled through their platforms, the suit argues
even easier to procure in Bangkok today to accommodate the number of patients that the court must apply Burmese law for
than it was two decades ago, and back then with meth­induced psychosis. harms done in Myanmar. American courts
“people were giving it away”. Many prefer it The response of South­East Asian gov­ can theoretically apply foreign laws in this
to heroin, which was South­East Asia’s ernments has not helped. Too often, the way, though there is little precedent for it.
drug of concern until it was supplanted by authorities punish users, locking them up Meta did not comment on the lawsuit
meth about a decade ago. Heroin’s numb­ or throwing them into “compulsory treat­ when asked, but said that it was “appalled
ing effects “blank you out”, says Suchart. ment” centres, where the only treatment by the crimes committed against the Roh­
“Meth makes me more active, gives me provided is abstinence and labour. This ingya people”. It added that it has improved
more strength to do things.” punitive response “has simply failed to its capacity to moderate Burmese content.
That appeals to people who work long work”, says Ann Fordham of the Interna­ The allegations fall into two categories.
hours, like Somchai (a pseudonym), who tional Drug Policy Consortium, an advoca­ The first is that since 2010 Facebook failed
was a truck driver when he first started cy group based in London, pointing to the actively and effectively to moderate con­
popping yaba, tablets containing four rocketing number of users. tent on its network that was contributing
parts caffeine to one part meth. Meth use The un argues that addicts should be to the incitement of genocide in Myanmar,
was once confined to the working class but treated like patients rather than rounded despite being aware of what was happen­
since crystal meth, the quality of which is up as criminals. Many governments are ing. The second is that Facebook’s own
higher than yaba, started flooding the mar­ starting to come around to that idea. But content­recommendation algorithms am­
ket about seven years ago, it has attracted a until they divert funding for drug treat­ plified the spread of this content. (Meta
well­heeled crowd. Stronger and purer ment from law enforcement to health has been approached for comment.)
than yaba, crystal is often used by those agencies, the number of addicts will con­ No precedent exists for such a case, at
who want more energy to party. tinue to grow—much to the satisfaction of least when it comes to social­media com­
Dealers can count on their customers the cartels that supply them. n panies. One distant parallel is with Radio
coming back to them. About one in ten Mille Collines, a Rwandan radio station
meth users will develop a dependency. that was instrumental in inciting the
That number rises to one in five for regular Social media and the law Rwandan genocide of 1994, in which per­
users of crystal meth. It is hard to get a clear haps 500,000 people, mostly Tutsis, were
picture of the number of meth abusers in Accounting for killed. Some of those who ran the station
South­East Asia because the only metrics were convicted of incitement to genocide.
of drug dependency in the region are unre­ algorithms The difference is that that was Radio Mille
liable. Drug­treatment admissions are in­ Collines’s main purpose. (Its former chair­
flated by involuntary referrals while the man is also accused of financing the im­
number of drug arrests may be fuelled by port of machetes.) International courts
Is Facebook liable for pogroms against
arrest quotas. went after those who urged the killing, not
Rohingyas in Myanmar?
Even so, indicators in most countries the manufacturers of the radio equipment.
are trending up. In the five years to 2020
the number of known meth users in Viet­
nam increased eight­fold. In Thailand ad­
T hat facebook was used to spread rhet­
oric that incited carnage in Myanmar is
hardly up for debate. According to the lead
The current lawsuits argue that Face­
book is both manufacturer and, to some
extent, messenger: its algorithms decide
missions for treatment doubled in the author of a un report published in 2018 the what people see. Whether and how the
three years to 2018. In Malaysia the number firm’s platform played a “determining firm is liable for what its algorithms do will
of crystal­meth users who had contact role” in the violence inflicted on Rohingya now be tested. n
with the authorities increased six­fold be­ Muslims by marauding Buddhists. Face­
tween 2016 and 2019. book acknowledges that it did not do
This is taking its toll on public health. enough to prevent its services from being
Meth kindles feelings of euphoria, often abused. But whether it is liable for what
spurring users to engage in risky behav­ happened is a trickier question.
iour, such as having unprotected sex at It may soon be answered. A legal cam­
“chemsex” parties. The urge to strengthen paign is under way on both sides of the At­
the rush leads some users to inject meth, lantic. It claims that Facebook, now re­
which increases the chance of transmit­ named Meta, should be held liable for al­
ting diseases like hiv. lowing users to spread such content dur­
Once the high wears off, some suffer ing the Rohingya genocide. A letter
from anxiety and paranoia. Over a third of delivered to Facebook’s London offices on
recreational users will acquire meth­in­ December 6th gave the firm notice of in­
duced psychosis, which is akin to schizo­ tent to sue it in the High Court. That suit
phrenia. A hospital in Thailand discovered will be on behalf of Rohingyas living every­
that six years after the completion in 2010 where in the world outside America, in­
of a study of patients diagnosed with cluding Bangladesh, where 1m or so dwell
meth­induced psychosis, 8.2% had as refugees.
died—a share that is ten times greater than The American complaint, filed on the
Thailand’s overall mortality rate. The top same day in California, is a class action on
three causes of death were accidents, sui­ behalf of Rohingyas living in America. It is Who is to blame?

012
 The Economist December 11th 2021 Asia 37

Married life in North Korea India’s chief of defence staff

Sunflower state Tragedy in the

Nilgiris
SEOUL D E LHI

Women have increasing economic Appointed to reform the armed forces,

clout, but no domestic power Bipin Rawat dies in a helicopter crash

B efore she fled south six years ago, Kim

Eun Kyoung spent her days in one of
North Korea’s many informal markets. She
I t was a short daytime flight, ferrying a
grandee from an airbase to a nearby de­
fence college. But the Mi­17v5 carrying
sold household goods and illicit South Ko­ General Bipin Rawat, India’s chief of de­
rean tv dramas. In the evening, she did the fence staff, and 12 others including his
housework and looked after her daughter. wife, did not make it. The Russian­built he­
She says her husband worked just a few licopter slammed into a wooded slope just
hours a day at his state­mandated factory a few minutes short of the Defence Servic­
job and spent the rest of his time gambling es Staff College at Wellington in the Nilgiri
and drinking. They hardly ever saw each Hills, a tea­growing region in southern In­
other. “I would have liked it if he’d helped dia. The general himself had studied at the
with the housework, but we lived totally all­services officer training institute, and
separate lives,” says Ms Kim (not her real was due to give a lecture that afternoon.
name). “The only thing we ever discussed Only one passenger, a decorated fighter pi­
honestly was our economic situation.” She acknowledges that many women com­ lot, appears to have survived the crash.
Ms Kim’s story is increasingly common plain about the double burden, but says the General Rawat was no ordinary service­
among North Korean women, judging fault lies with the system that forces the man. The 63­year­old was India’s highest­
from surveys of those who have fled to the men to work without much pay. ranking uniformed officer and the first to
South over the past two decades. After the Even when people blame the state, the serve as a joint chief of its three military
collapse of the North’s planned economy gap between expectations and reality has services. The role was created in 2019 as
and public­distribution system in the begun to cause conflict. Some overbur­ part of reforms intended to modernise and
1990s, the state grew more relaxed about dened wives demand help with chores or a streamline one of the world’s biggest and
enforcing labour requirements for wom­ say in family decisions. Many husbands most tradition­bound armed forces. Part of
en. The regime continues to compel most insist on being respected and obeyed, re­ General Rawat’s mission was to break
men to work for the state, but pays most of gardless of how much they contribute. down the divisions among the army, navy
them very little or nothing altogether. Common insults for useless husbands in­ and air force and create instead a cohesive
Women, who are both freer than men to clude haebaragi (“sunflowers” who sit pret­ central command. That, in turn, was to
spend time working in the markets and ty waiting for their wives to come home), oversee regional commands comprising
compelled to do so in order to feed their natjeondeung (“day lamps”, as useful as a all three services, to allow a more co­ordi­
families, have therefore acquired some lamp turned on in the sunshine) or bul­ nated response to the threats India faces.
economic power. pyeon (“inconvenience”, a play on nam­ This change, long demanded by civilian
In many North Korean families, women pyeon, the Korean word for husband). planners, has grown more urgent as India’s
now appear to be the main breadwinners. The most successful marriages appear customary preoccupation with Pakistan is
In 2020 the Database Centre for North Ko­ to be those that combine a woman’s eco­ superseded by the rise of a much mightier
rean Human Rights (nkdb), an ngo in nomic activities with a man’s political in­ and increasingly aggressive China.
Seoul, the South’s capital, asked 60 refu­ fluence. Ms Jeong says her marriage to a Despite inevitable speculation, the
gees from Hyesan, a city on North Korea’s high­ranking police officer was a happy crash appears to have been accidental. The
border with China, about their married one even though they lived mostly off what Indian army operates more than a hundred
lives back home. Fully 47% said the wife she and her mother earned as smugglers. such aircraft, often in trickier circum­
brought home the kimchi, 37% said it was “My husband had little money, but a lot of stances. The payload, weather conditions
the husband and 17% said both contributed power,” she explains. Men suffer through and terrain posed no special challenges. “It
equally. Hyesan, an unusually open border years of badly paid army or police jobs to is natural to look for causes,” says Ajai
town, may not be representative, cautions rise through the ranks, at which point they Shukla, a defence analyst, “but very often a
Hanna Song of nkdb. But testimonies of can bring both higher salaries and oppor­ crash can happen within full compliance.”
refugees from other parts of the country tunities to top them up by extracting bribes General Rawat will be quickly replaced,
suggest similar trends. from smugglers or by earning bonuses by most likely by the most senior of the cur­
Women’s extra earnings have yet to catching them—as well as the ability to rent service heads, army chief of staff Gen­
change expectations about what they do at protect their wives’ grey­market activities. eral Manoj Mukund Naravane. Tough and
home, however. Traditional views of fam­ The state is unlikely to offer women blunt, the deceased chief was widely ad­
ily life remain common, notes Ms Song. more rights or men better jobs. After a brief mired in the armed forces and broadly
Among those surveyed by nkdb, both men period of championing female fighter pi­ popular with the public. But he was at
and women considered child care and lots and engineers, Kim Jong Un, the times controversial. In 2016 Narendra Mo­
housework to be women’s work. “Of course North’s dictator, has recently reverted to di, the prime minister, selected him as ar­
women should look after children, they’re promoting a traditional approach to family my chief over the heads of two more senior
much better at it,” says Jeong Jin, a 30­ life, urging women to look pretty for their generals. His subsequent appointment as
something woman from Hyesan who came husbands and to care for their children. For overall commander was seen by some as a
to Seoul in 2015. “My husband always North Korea’s harried married women, Mr reward for breaking with a strong tradition
looked really unnatural holding our baby.” Kim is about as useful as a natjeondeung. n of strictly insulating the army from poli­

012
 38 Asia The Economist December 11th 2021

tics by occasionally voicing views suppor­ far from the border with Myanmar. When a structural reforms and to improve perfor­
tive of Mr Modi’s Hindu­nationalist poli­ pickup carrying a group of men ap­ mance—including respect for the rights of
cies. In 2017 he awarded a commendation proached the soldiers on December 4th, other Indians. At the same time, and de­
for “personal initiative” to an officer whose they claim they warned it to stop, opening spite growing external threats, the army
unit kidnapped a passerby in the restive re­ fire when it failed to do so. Survivors insist will continue to face what may be its oldest
gion of Kashmir and strapped him to the that there was no warning and that the and most intractable foe: stingy budgets.
bonnet of an army jeep in order to discour­ eight people riddled with bullets were coal General Rawat’s tragic death may not have
age stone­throwing. miners returning to their village. Subse­ been due to old or faulty equipment, but
Only a few days before the fatal crash, quent clashes between soldiers and angry much of India’s other kit—including
Indian soldiers again invited criticism for villagers left seven more civilians dead. 1960s­era mig and Jaguar fighter jets—is
human­rights offences. According to army Indian politicians and pundits are in woefully outdated. And with China’s gdp
spokesmen, commandos in the far north­ general very protective of the armed forces. outstripping India’s by a factor of five, the
eastern state of Nagaland had received re­ Even so, General Rawat’s successor will northern giant is now spending over three
ports that guerrillas were using a road not face mounting pressure both to complete times more than India on its army. n

Banyan What the generals wreak

Even as Aung San Suu Kyi is sentenced, Myanmar’s opposition grows stronger

T he guilty verdicts that a court in

Naypyidaw, Myanmar’s capital, hand­
ed down to Aung San Suu Kyi on Decem­
founding father, General Aung San, before
1988 she never expected to become an icon
of democracy and eventual leader. That
centre for decades; they viewed her as
just another Bamar chauvinist. Worst of
all, she cosseted the army which her
ber 6th were both cruel and farcical. One year a popular uprising against the mil­ father had once led. Following its appall­
charge had to do with Ms Suu Kyi breach­ itary regime that had ruled since 1962 ing pogroms against Muslim Rohingyas,
ing coronavirus restrictions at a cam­ thrust her into prominence. Put under her defence of the Tatmadaw at The
paign rally last year. Sentence: two years house arrest in 1989 before her National Hague in 2019 led to calls for her Nobel
in prison. The second charge—for which, League for Democracy (nld) swept elec­ peace prize to be rescinded. Ms Suu Kyi’s
a further two years—was that Ms Suu Kyi tions that the Tatmadaw could not accept, high­handedness represented a national
disturbed public order. As evidence, her moral authority only grew. In 2010 the tragedy. Her reimprisonment fuses that
prosecutors cited statements on her junta lifted her house arrest, and then tragedy with a personal one—her cod­
party’s Facebook page. Win Myint, a ceded political power. The nld won elec­ dling of the generals has come to naught.
former president, was also sentenced to tions in 2015 and again last year by land­ Yet so too, already, has General Min
four years in prison. slides. It proved more than General Min Aung Hlaing’s calculation that in cancel­
Never mind that the posts were made Aung Hlaing could bear. ling the nation’s democratic icon he
after the Tatmadaw, as Myanmar’s army Yet by the time of this year’s coup, Ms turns back time. With extraordinary
is known, had launched its coup in Feb­ Suu Kyi’s own flaws had come more plain­ speed, the opposition has moved out
ruary against Ms Suu Kyi, then the coun­ ly into view. She had done little to refresh from under Ms Suu Kyi’s shadow, even as
try’s de facto leader, and her democrati­ the nld’s leadership with younger, more she remains widely revered. Where the
cally elected government, during which technocratic Burmese. Even among the nld was Bamar­centric, the shadow
she and other civilian leaders were bun­ old guard she reigned as a micromanaging National Unity Government (nug), oper­
dled off incommunicado. To compound monarch. So the government struggled to ating underground or from abroad, is far
the farce, following the verdicts the coup promote social and economic change. more representative of Myanmar’s ethnic
leader, General Min Aung Hlaing, issued Popular in the heartlands of the ethnic­ diversity. The nug acknowledges the
a partial pardon and magnanimously cut Bamar majority, she failed to win the trust rights of Rohingyas, whom Ms Suu Kyi
Ms Suu Kyi’s outrageous four­year sen­ of Myanmar’s other ethnicities, some of disparaged as alien “Bengalis” without a
tence in half. whom have been in conflict with the claim to citizenship. Its cabinet is filled
The gesture will have fooled no one. A with women, where Ms Suu Kyi’s tolerat­
raft of further charges still hangs over Ms ed only one—herself.
Suu Kyi. They range from smuggling Opposition to the coup has also
unlicensed walkie­talkies into the coun­ moved away from Ms Suu Kyi’s doctrine
try for her bodyguards to benefiting from of non­violence. To be sure, passive
a government helicopter. The charges are resistance remains a feature. But the
to ensure, at a minimum, that she cannot democratic opposition is also forging
take part in the election which the ruling ties with many of the country’s ethnic
junta promises for 2023. It is probably armies to create a coalescing armed
also to ensure that the 76­year­old, who resistance to the junta. The Tatmadaw
spent 15 lonely years under house arrest certainly retains the advantage. But its
for advocating democracy, never walks brutalities, which include the recent
free again. “They want her to die in pri­ burning of eight mountain villages in
son,” as Dr Sasa, a spokesman for the Chin state, sap what remains of its moral
shadow government, told the bbc. authority. As the army struggles for
If he is right, the verdicts may well control, General Min Aung Hlaing may be
bring to a close the extraordinary public doing more to forge a powerful opposi­
life of Ms Suu Kyi. Daughter of Burma’s tion than Ms Suu Kyi ever managed.

012
 China The Economist December 11th 2021 39

→ Also in this section

40 Reinventing Macau
42 Chaguan: The Olympics, them and us

China in Africa China is becoming a more adventurous

naval power. It has dramatically beefed up
Harbouring no malice? its fleet this century, amassing more ships
(though not more tonnage) than America’s
navy. But most of these vessels keep to
Indo­Pacific waters. It is unclear whether
China has military ambitions farther
afield. The Chinese navy cannot hope to
NEW YO RK
sustain an Atlantic­facing armada that
America worries about China’s military intentions in Africa
would rival that of America and its allies,

W hen china began building its first

overseas naval base in 2016, in Dji­
bouti on the Horn of Africa, Chinese offi­
some sway as an investor or operator. The
Centre for Strategic and International
Studies (csis), a think­tank in Washington,
whose ships, bases and supply lines domi­
nate the central and north Atlantic.
It may be that China’s reason for want­
cials tried to allay Western anxiety about has identified nearly 50 ports in sub­Saha­ ing more access to ports for its navy is
their country’s expanded military foot­ ran Africa where China is involved, some­ much as it described its motives in
print. They said the outpost (pictured) was times just in building work. csis says Chi­ Djibouti: securing shipping lanes for Chi­
only for supporting multinational anti­pi­ na may use them “to increase its military nese trade, fighting piracy and protecting
racy efforts, helping to secure vital ship­ and political reach” (see map, next page). Chinese citizens abroad. The navy began to
ping lanes and enabling China to protect Chinese navy ships have visited some. feel a more pressing need for far­flung bas­
its citizens in the region. Five years later, On December 5th the Wall Street Journal es in 2011, when it helped conduct an emer­
the facility in Djibouti remains the Chinese said China wanted a naval presence in gency evacuation of 30,000 Chinese citi­
armed forces’ only foreign bastion. Equatorial Guinea, citing American intelli­ zens from Libya as that country descended
But Chinese officials are quietly looking gence reports. A base there would give Chi­ into civil war.
at the possibility of building more. In No­ na’s navy its first permanent foothold on
vember the Pentagon’s annual report on the Atlantic side of Africa. It would be Safety first
China’s military power identified 13 coun­ nearly 10,000km from Washington, but of­ In the past decade China’s growing de­
tries where, it believes, China has probably ficials there still worry. In October the mand for imports ranging from oil to cop­
considered locating other bases. They American government was spooked per, and the expansion of its commercial
range from Tajikistan in Central Asia to An­ enough to send Jon Finer, the deputy na­ activity abroad, have increased its con­
gola on the Atlantic coast of Africa. Ameri­ tional security adviser, to visit the tiny oil­ cerns about keeping trade routes safe. Un­
can officials believe China has made secret producing country of 1.4m people and ad­ til the pandemic struck it had 1.5m workers
basing or port­access agreements with sev­ vise its leaders to resist China’s overtures. in foreign countries. Chinese military
eral of them, including Cambodia and the Mr Finer is believed to have told officials in white papers stress a need for the navy to
United Arab Emirates. Equatorial Guinea that allowing China to protect such “overseas interests”.
It may help China that there are nearly open a base would raise national­security But there may be other considerations.
100 civilian ports overseas in which it has concerns in America. Chinese military analysts openly advocate

012
 40 China The Economist December 11th 2021

pushing into waters far from home to di­ rupt and in a financial shambles. The In­ Gambling in Macau
vert American attention and resources ternational Monetary Fund approved a
from Chinese waters, writes Ryan Martin­ bail­out in 2019. No dice for vice
son of the us Naval War College. He notes a It was an unexpected reversal of fortune
book by Hu Bo of Peking University, in for Teodoro Nguema Obiang Mangue, the
which the author acknowledges that Chi­ vice­president who is also the president’s
na’s navy could not compete with America son, to receive Mr Finer in October. In re­
HO NG KO NG
for supremacy of faraway seas, but sug­ cent years America and its allies have con­
China wants the gambling enclave of
gests it could “pin down” some American fiscated allegedly ill­gotten luxury assets
Macau to draw a new hand
forces that might otherwise be sent to East from him (America says it is using the pro­
Asia. Mr Martinson also cites Liu Zhe, the
captain of China’s first aircraft­carrier, the
Liaoning, who wrote in a well­publicised
ceeds to fund covid­19 vaccines and other
medical aid for the country). The vice­pres­
ident posted a video clip of the meeting on
S takes in punto banco, a popular ver­
sion of the card game baccarat, have of­
ten risen to well over $100,000 in Macau’s
essay in 2017 that “the farther away we are social media, and another in which he ex­ vip suites. The high­rollers have usually
from our territorial sea, the more secure pressed gratitude for a diplomatic gift he come from the Chinese mainland. Even be­
will be the motherland behind us.” Estab­ had received in connection with the visit: a fore flying into the gambling haven they
lishing bases facing the Atlantic would cer­ silver platter with a presidential seal. would commonly agree to bet upwards of
tainly get America’s attention. A Chinese base at Bata would probably $1m during their stays. Those who have ar­
But Isaac Kardon, a colleague of Mr pose little serious threat to America, says rived short of cash because of the main­
Martinson’s at the Naval War College, notes Mr Kardon, unless it were to include a fa­ land’s strict capital controls have easily
China’s leaders have not parroted blustery cility for Chinese submarines. But building found lenders of Macanese patacas.
rhetoric about tying down American ships. one would be virtually impossible to con­ The flow of super­rich punters from the
They would prefer to set up bases without ceal. Equatorial Guinea would be unlikely mainland has been enabled by “junket”
antagonising America. As it happens, most to risk America’s anger by letting China do agents and promoters. In 2019 sjm Hold­
countries are reluctant to rile the United so. No clear evidence has come to light that ings, which owns a huge French Renais­
States by hosting Chinese forces. Agreeing China has any such intention. sance­style casino in Macau, brought in al­
to a Chinese base would be a transactional A week after Mr Finer’s visit, China’s most all of its vip customers through such
arrangement, doing little to improve the president, Xi Jinping, talked by phone to middlemen. The share of non­vip gam­
security of the host. Unlike America, China his counterpart, Teodoro Obiang Nguema bling in the city has been rising in recent
disapproves of alliances and abhors the Mbasogo. Chinese officials said Mr Obiang years. But before the pandemic, vips still
use of its forces in any combat role in other described China as Equatorial Guinea’s accounted for about a third of the territo­
countries’ conflicts. “most important strategic partner”. On De­ ry’s gross revenues from gaming.
The Gulf of Guinea would be a logical cember 7th his son, the vice­president, Covid­19 has been a blow to the indus­
place to look for a base. Piracy is a scourge tweeted a response to the Journal’s story try. So, too, have stepped­up efforts by Chi­
there, as it is in the Gulf of Aden off Djibou­ about the base. “China is a model of a na’s government to curb the junket busi­
ti, so China could plausibly argue that its friendly country and a strategic partner ness. Betting is illegal on the mainland. In
help is needed. A Chinese company has but, for now, there is no such agreement,” March China said assisting cross­border
built a deepwater commercial port at Bata he wrote. He quickly added: “Remember al­ gambling was also against the law. On No­
in Equatorial Guinea. It could adapt that so that Equatorial Guinea is a sovereign vember 26th police in the coastal city of
for Chinese warships. And the family­run and independent country and can sign co­ Wenzhou issued an arrest warrant for Al­
dictatorship in Equatorial Guinea happens operation agreements with any friendly vin Chau, the head of SunCity, Macau’s big­
to be the sort that China is well­practised at country.” American officials may want to gest junket firm. He was later seized in Ma­
doing business with in Africa: brutal, cor­ schedule a follow­up trip. n cau. Officials there claimed this was unre­
lated to the mainland’s warrant, but many
in his business felt a deep chill.
The charges against Mr Chau hint at the
Mauritania
Sudan Eritrea scope of the junket industry in Macau.
Wenzhou’s police say he had 12,000 agents
Cape f Ade
n
serving 80,000 customers on the main­
Togo Gulf o
Verde Guinea Ghana land. SunCity allegedly arranged under­
Nigeria Djibouti
ground banking services to help them
Sierra Leone evade capital controls. Junkets are legal in
Cameroon
Ivory Coast Gulf of Guinea Macau. But the mainland’s laws appear to
Gabon
Kenya have trumped local ones.
São Tomé & Príncipe How will Macau survive? China wants
Congo-
Brazzaville to see it transformed from a city of vice into
IN D I A N
Equatorial Guinea Tanzania a regional entertainment centre and tech
(Port at Bata) OCEAN
hub. This has proved difficult because
ATLA NTIC Angola most of its available land has been used to
OCEAN
build casinos. Macau’s government hopes
a new development zone will help. It is on
nearby Hengqin, an island three times Ma­
Namibia
Madagascar cau’s size. It belongs to the mainland and
Ports in sub-Saharan Africa, by type Mozambique has been leased in part to Macau. Hengqin
of investment from China, 2019 will have theme parks, family attractions
Builder Operator Funder South and a high­speed rail link with China’s in­
Africa terior. The former Portuguese enclave will
Source: Centre for Strategic and International Studies
become even more like a mainland city. n

012
012
 42 China The Economist December 11th 2021

Chaguan Spoil­sports

Beijing’s Winter Olympics may hasten a rift between China and the West
Some commentators call these exchanges an empty war of
words. They note that Western countries are still sending their
athletes to the games, and they detect no new Chinese sanctions
on America. Their insouciance is a mistake, twice over. First, these
seemingly arcane official boycotts are a glimpse of a real­world
diplomatic crisis. America’s government uses the gravest of terms,
including crimes against humanity, to describe China’s behaviour
in Xinjiang, where the party and its security agents have demol­
ished mosques, jailed Muslims for such crimes as owning a Koran
or praying in public, sent the children of detainees for patriotic
education in orphanages and subjected millions more to high­
technology surveillance. Such language generates its own logic.
Ms Psaki is surely right when she says that America’s ties with Chi­
na can no longer be “business as usual”.
That stance is morally coherent. Even if China’s own policy pa­
pers and work reports, public procurement documents and offi­
cial speeches are the only evidence taken into account, its govern­
ment is indisputably committing horrors in Xinjiang. But saying
so makes it hard to have anything approaching normal relations,
for all that the Biden administration insists that it has no beef with
the Chinese public at large. At a time when many ordinary Chinese
have rarely been so proud of their country, Western governments

T o a great number of Chinese, their country has never been as

impressive as it is today. They see it as self­evident that Chi­
na—their increasingly strong, modern motherland—is a worthy
are telling them that they live in a form of pariah state.
Second, China’s management of the games is itself likely to
provoke mutual incomprehension between the publics of China
host of uplifting global events such as the Winter Olympics, which and the West. The reason is covid. China has spent almost two
are set to open in Beijing on February 4th. years trying to eradicate the virus with ferocious testing and trac­
At the very same moment, an opposite consensus is forming in ing regimes, by locking down whole towns when a handful of cas­
the West. In many free societies, China’s rulers are increasingly es emerge, and by tightly controlling international borders.
seen as capable but cruel. They are credited with prodigious feats, Soon, many thousands will arrive from a world that is living
whether that means girdling the nation with high­speed railways with covid—though not foreign spectators, who are barred. China
or sending rockets to the Moon. But they are seen as unbearably re­ plans to manage this threat by sealing games venues inside secure
pressive, too, notably towards ethnic and religious minorities in bubbles. But it is inevitable that some participants will test posi­
such regions as Xinjiang. To Western sceptics, it is grotesque to al­ tive or have fevers on arrival. Under China’s rules, they will be
low the pageantry of the Olympics to be co­opted by such a regime. hauled off to quarantine hospitals, and team­mates in close con­
That view has supporters in high places. In announcing that tact will be isolated in hotel rooms. In Beijing foreign embassies
America will not send its customary delegation of grandees to are anxiously sharing tales from a Luge World Cup staged as a test
cheer on Team usa at the winter games, the White House press event last month. The sporting facilities were stunningly ad­
secretary, Jen Psaki, restated the Biden administration’s position vanced but pandemic controls were a shock, from the moment a
that China’s iron­fisted rule over Xinjiang—where as many as a charter flight with over 200 athletes and sports officials landed in
million Muslims have passed through re­education camps— Beijing. Because two athletes were flagged as suspect on arrival,
amounts to genocide. As a result, she declared, America should their plane­mates were held on airport buses for hours, forcing
not help China pull off a triumphant Olympics. To use her words: some to pee in bottles. On November 16th, diplomats relate, a Ger­
“We will not be contributing to the fanfare of the games.” A day lat­ man athlete was grabbed from the luge track by staff in hazmat
er, Australia announced its own diplomatic boycott of the games, suits after what turned out to be a false positive test, and isolated
citing both China’s record on human rights and its use of econom­ for two days before being declared safe. A Polish competitor in­
ic coercion to punish Australia for such offences as seeking an in­ jured by a faulty barrier on the luge track reportedly had to wait for
dependent inquiry into the origins of the covid­19 pandemic. Oth­ a negative covid test before doctors would touch his shattered leg.
ers, from Britain to Canada and New Zealand, are declining to send
government ministers or high­ranking officials. Some gulfs are too wide to bridge
China has responded with scorn, anger and censorship. The China’s controlling ways will extend to the press. A Western dip­
Olympics are a party “by invitation only” to which American poli­ lomat predicts “journalists will be kept like monkeys in a cage”,
ticians had not been asked, the foreign ministry’s spokeswoman, denied free access to athletes. Yet if foreigners complain about a
Hua Chunying tweeted, though in reality each national Olympic sinister “autocratic Olympics” many Chinese will be livid. They
committee issues its own invitations. Ms Hua’s pugnacious depu­ will see proof that Westerners are too irresponsible to control co­
ty, Zhao Lijian, went further, warning of unspecified “firm coun­ vid: witness the grumbling about being kept safe in Beijing. Out­
termeasures”. “Speaking of genocide,” Mr Zhao growled from a siders will sound all the more ungrateful because 100,000 Chinese
foreign ministry podium, “the us fits this label better than anyone volunteers and staff working in the Olympic bubbles face 21 days
else for the evil crimes they committed against Native Americans.” of quarantine, away from home, at the end. Two worldviews are
Online, censors blocked most discussion of the boycotts. about to collide. The effects may be felt long after the final race. n

012
 SPECIAL
REPORT:
Japan

→ December 11th 2021

3 The new era
4 Foreign and security policy
6 Climate change
8 Tokyo
9 Demographic challenges
10 Immigration
10 The economy
12 Looking ahead

On the front line

 Navigate the
new global order
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Twenty journalists from The Economist and leading global thinkers

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Distinguished-service professor,
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Former prime minister of Australia,
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The next start date is February 2nd 2022.

012
 Special report Japan The Economist December 11th 2021 3

The new era

Reiwa Japan offers the world examples to follow as well as ones not to. It is as relevant as ever, argues Noah Sneider
new imperial era began in spring 2019, when a non­ powerful lower house. No populist rabble­rousers hijacked the de­
Japan’s
descript man in a dark suit revealed its name: Reiwa. The first bates and no pseudo­authoritarians impugned the outcome. Aver­
character, rei, means “auspicious” or “orderly”; wa means “harmo­ age life expectancy in Japan hit new highs of 88 years for women
ny” or “peace” (officials chose “beautiful harmony” as the English and 82 for men. Excess mortality actually fell; only 18,000 have
rendering). For the first time the name came not from classical died of covid­19, in a country of 126m. Masks have stayed on and
Chinese literature, but from Japan’s Manyoshu poetry anthology, double­vaccination rates have risen to around 80%.
compiled over a millennium ago: “In this auspicious (rei) month The rest of Reiwa will demand more resilience in the face of
of early spring, the weather is fine and the wind gentle (wa).” unprecedented challenges. In the Showa era, from 1926 to 1989, Ja­
The early months of Reiwa were hardly auspicious, nor the pan lost and recovered from the second world war, grew into the
winds gentle. In early 2020 covid­19 blew in. Japanese donned world’s second­largest economy and led Ezra Vogel, a Harvard his­
masks and stayed at home, fuming at politicians who continued torian, to write about “Japan as Number One” and to urge America
to dine out. China, Japan’s biggest trade partner, flexed its muscles to learn lessons from its former foe. Mr Abe had this in mind when
and suppressed Hong Kong that summer. In the autumn the presi­ he declared that “Japan is back”—his Olympics recalled those of
dent of the United States, Japan’s chief ally, refused to accept his 1964, which symbolised the post­war revival. Such nostalgic bra­
defeat at the ballot box. The pandemic postponed the 2020 Olym­ vado exaggerates modern Japan’s successes. But the pessimism of
pics, which Abe Shinzo had hoped to be the crowning achieve­ Japan’s “lost decades”, a hangover from the Heisei era that fol­
ment of his record­long tenure as prime minister. Ever fewer ba­ lowed Showa, when the bubble burst and the economy stagnated,
bies were born. Mr Abe’s intestinal illness led him to step down. also exaggerates its failures.
The nondescript man in the dark suit, Suga Yoshihide, took over, Reiwa’s dawn has already provoked plenty of soul­searching.
but after a year he too was gone. “The question for the Reiwa era is what kind of Japan do we want to
Yet amid all the turbulence, Japan has fared rather well. The get back?” muses Funabashi Yoichi, a writer. Japan is in a “post­
Olympics went off in the summer of 2021, with few spectators and growth or post­development era”, and its values must evolve from
little fanfare, but without the epidemiological disaster that detrac­ the “faster, higher, stronger” of Showa to “diversity, resilience and
tors had predicted. The ruling Liberal Democratic Party (ldp) sustainability”, argues Yoshimi Shunya of the University of Tokyo.
chose a new leader, Kishida Fumio, another inoffensive figure. On Others hope to reprise past glories. “We must make Japan Number
October 31st voters gave the party a healthy majority in the Diet’s One again,” declares Amari Akira, an ldp bigwig.

012
 4 Special report Japan The Economist December 11th 2021

At least one safe bet is that Reiwa will be a time of demographic Their scale is local, not national or global, their arenas the private
decline. On current trends the population will shrink by a fifth to sector or civil society, not politics.
100m by 2050. It is likely also to be a period defined by competi­ This is partly because politics has become ossified in the ab­
tion between America and China, by natural catastrophes, by age­ sence of real competition. Such stasis is a big reason why being on
ing and by secular stagnation. This special report will explore how the front line does not mean being in the vanguard. Japan’s treat­
Japan is grappling with these issues. Once seen as the maladies of ment of women is retrograde, its protection of minority rights
an idiosyncratic patient, they have become endemic for many— weak, its government services archaic and its climate policy dirty.
they simply afflicted Japan earlier or more intensely. A more fit­ Many institutional frameworks are stuck in the past. Labour laws
ting identity for Reiwa­era Japan may be what Komiyama Hiroshi, are designed for industrial­era monogamous employment, tax
a former president of the University of Tokyo, calls kadaisenshin- codes and family law for the Meiji­era patriarchy, immigration
koku, or an “advanced­in­challenges country”. practices for a growing population. “The central government is
Put another way, Reiwa will find Japan to be on the global front running behind the times,” laments Yanai Tadashi, the founder
line. That is the result of proximity, not prescience. But it will and head of Fast Retailing, and Japan’s second­richest person.
nonetheless fall to Japan to demonstrate foresight in working out Those weaknesses will hamper Japan in the Reiwa era. None­
how to survive there. Its successes can serve as models, and its theless, its ability to cope should not be underestimated. And the
failures as cautionary tales. It is a “harbinger state”, argues Phillip world should pay attention. Showa Japan once offered lessons in
Lipscy of the University of Toronto. “We treat Japan as unique at how to win the future, while Heisei Japan showed how to lose it.
our own peril.” Reiwa Japan will offer lessons in how to survive. The place to start
is on Japan’s front line with China. n
An outdated image
All too often what happens in Japan is seen as sui generis, reflect­
ing an almost­mystical social cohesion possible only on a closed Foreign and security policy
island with a relatively homogeneous citizenry. This cultural es­
sentialism is for Japanese both a source of pride and a cover to ig­
nore examples from outside, while giving foreigners (especially
Westerners) a source of fascination and a licence to discount un­
Into the world
sexy policies, from disaster drills to zoning laws. Culture is obvi­
ously important, but it also changes, often through cross­pollina­
tion. The behaviour that had the most impact on the course of co­ YO NAGUNI
vid­19 in Japan—mask­wearing—first came from the West, taking The case for a more active and interventionist security policy
root during the Spanish flu of 1918. In Japanese, “face mask” is still
written in katakana, the alphabet reserved for foreign words.
The idea that Japan never changes is an old chestnut that needs
cracking. These days change is only gradual. But that does not
Y onaguni, a rocky island at the edge of the East China Sea,
long had few defences: just two policemen and two guns. That
suited locals, a laid­back, heavy­drinking bunch—until recently.
mean it does not happen—and that it cannot accelerate, as it has at China’s rise has made many wary. “Look at what’s happening in
times in the past. One reason the economy has avoided the col­ Hong Kong,” frets Itokazu Kenichi, the island’s mayor. There is al­
lapse that some predicted decades ago is that policies have so “a sense that America is in decline”, says Tasato Chiyoki, a
changed. The transformation is even more pronounced in foreign councillor. As Japan’s westernmost territory, such worries are no
affairs. Once derided for “karaoke diplomacy”, singing from Amer­ abstraction: on a clear day, Taiwan looms a mere 111km away.
ican tunes, Japan now does more of its own song­writing. Dip­ Japan’s Self­Defence Forces (sdf), as its army is called, opened
lomats speak of Asia in terms of the “Free and Open Indo­Pacific”, a small outpost on Yonaguni in 2016. It faced resistance, but oppo­
a coinage of Mr Abe’s. Trade negotiators discuss “Data Free Flow sition has since faded. Earlier this year, local voters elected Mr Ito­
with Trust”, another Japanese idea. Central bankers ponder “quan­ kazu, an advocate of expanding the military presence. Even some
titative easing”, also pioneered in Japan. Years before Joe Biden who were against have changed their tune. “I don’t think China
promised America would “Build Back Better”, Japan pushed to in­ will invade,” Mr Tasato says. “But with the current situation, you
sert the phrase into the un framework for disaster­risk reduction. never know.” Now he would like his government to plan for refu­
Japanese society is changing too, though mostly from the bot­
tom up. “It seems as if change is not happening, but the seeds for
future change are there,” says Mr Komiyama. Old ideals, from the
sarariman (salaryman) to shimaguni (island nation), are eroding. Early suspicion
In Japan’s stubbornly seniority­based system, the Showa genera­ What is your opinion of China?
tion still runs the country. But those who follow have a different % responding unfavourable*
outlook and different values, reckons Hiroi Yoshinori, a philoso­ First Senkaku/Diaoyu Islands crisis 100
pher at Kyoto University. “The young don’t know the period of Japan
high growth—there is a huge generational gap.” 80
For too many, it is an anxious time. That comes through in con­
Germany
servative voting patterns: young Japanese are more likely to sup­ 60
port the ldp than the old. Some retreat into the dark realms of the
France South Korea
netto-uyoku (far­right online extremism) or isolation as hikikomori 40
(shut­ins)—hardly uniquely Japanese behaviour. Others, though, Australia
embrace the chance for reinvention, choosing startups or free­ United States 20
lancing over large companies and lifetime employment. Their en­ Britain
ergies are often channelled not into products and services, but in­ 0
to cultivating the social capital that makes a society resilient, into 2002 04 06 08 10 12 14 16 18 20 21
volunteering, social entrepreneurship and socially engaged art. Source: Pew Research Centre *Somewhat or very

012
 The Economist December 11th 2021 Special report Japan 5

gees who might flee Taiwan in a conflict.

If rivalry between China and America is the big story in 21st Japan’s Self-
Defence Forces Kyushu
century geopolitics, no other country, except perhaps Taiwan it­ Bases established since 2016
self, has as much influence as Japan over how it will unfold—nor At Apr 2021 RUSSIA
as much to lose if it goes badly. “Japan is the front line,” says Gen­ Ea st
Ground
eral Yoshida Yoshihide, chief of the army. This reality is forcing a Maritime Chin a
realisation that, although there can be no substitute for America, Air S ea Hokkaido
Japan must supplement it in order to maintain a favourable bal­ Senkaku/
ance of power. Diaoyu Islands
Okinawa
Japan is strengthening defences and building ties with others. TAIWAN
Yonaguni Gojome
Tanaka Akihiko, of the National Graduate Institute for Policy
150 km
Studies (grips) in Tokyo, speaks of a shift from a “one­pillar” to a Source: Japan Ministry of Defence
“multi­pillar” architecture. “We can’t rely on America alone,” he Seoul Toyama
says. That does not mean turning away but keeping America close SOUTH Tokyo
by contributing more. Nor does it mean antagonising China, upon KOREA Honshu
Kobe Osaka
which the economy depends. “As the rest of us figure out how to CHINA Fukuoka
compete with China without catastrophe, Japan has been there for Omachi Shikoku JAPAN
ou gh
at least a decade and Japan has the best strategy,” says Michael Shanghai Kyushu i Tr
n ka
Green, a former official at America’s National Security Council. Na
Ea st
Although this strategy coalesced under Mr Abe, it is the cul­
Ch in a Sea depth

d s
mination of a long evolution. After the war Yoshida Shigeru, a for­ Metres
S ea
mer prime minister, said Japan should shelter under the Ameri­

n
0
PACI FIC

la
can security umbrella and focus on reviving its economy. Others, 200
Okinawa OCEAN

s
Taipei 2,000
such as Kishi Nobusuke, Mr Abe’s grandfather, wanted to ditch the tr.

I
nS i 4,000
strictures of the American­imposed constitution and re­establish e
a

s 6,000
iw

n
Ta

Japan as a military power. The Yoshida doctrine won. For decades, N

a 250 km 8,000
TAIWAN
Japanese foreign policy was limited to economics.
The first inklings of change came under Nakasone Yasuhiro in
the 1980s. But the big turning­point was the first Gulf war. “Even
Honduras went there with a stick,” says Kanehara Nobukatsu, a which the Soviet Union invaded Japan alone, says Michishita Na­
later deputy national security adviser under Mr Abe. “Japan sat on rushige, also of grips. “The constitutional limit really distorted
the couch and sent a cheque—that was our reputation.” When the the scenario,” he says. No longer. Discussions about a clash with
Kuwaitis took out an advertisement in American newspapers to China are under way. Japanese and American officials talk a lot
thank the coalition, Japan was left off the list, prompting policy­ about Taiwan. In April Mr Biden and Mr Suga, then prime minis­
makers to rethink its role, says Iokibe Makoto, a historian of diplo­ ter, mentioned “peace and stability in the Taiwan Strait”, the first
macy. The shift coincided with the rise of a generation of revision­ such reference since 1969.
ist leaders. Behind closed doors, consultations focus on two types of con­
tingency. First is an invasion of Taiwan, probably involving Chi­
The China threat nese attacks on American bases in Japan and perhaps an attempt
China’s aggression has been a catalyst, especially in clashes over to seize Japanese islands. But senior officials worry more about a
the disputed Senkaku Islands in 2010, when it banned exports of second, less clear­cut situation, such as a blockade of Taiwan, or
rare earths to Japan. “We had been in a greenhouse,” says Miyake occupation of its outer­lying islands. There is no consensus about
Kunihiko, a former diplomat. “China was kind enough to break the Japan’s red lines (nor an understanding of America’s). A Japanese
windows—the cold wind came in and we woke up.” America’s am­ leader now has the tools to act, but needs a political decision to
bivalence to Asia has made Japanese leaders fear abandonment; use them. Officials fret that the public does not share their sense
Donald Trump’s erratic behaviour led some to speak of going nuc­ of urgency, and might recoil against using force. The ldp is in co­
lear (an option that remains unlikely). Officials welcome Joe Bi­ alition with Komeito, a pacifist party with close ties to China. Is­
den’s focus on Asia, but worry about the absence of American sues between China and Taiwan “need to be resolved through
trade policy and a tendency to frame the contest with China in those parties”, says Yamaguchi Natsuo, Komeito’s leader.
ideological terms. In Mr Biden’s talk of a “foreign policy for the The sdf has been moving resources from Hokkaido towards
American middle class”, many hear echoes of “America First”. the south­west. A host of new bases have appeared in the Nansei
That has increased the urgency to do more at home. To Mr Abe’s Islands, which spread some 1,200km from Okinawa to Yonaguni.
chagrin, Article Nine of the constitution, which forbids “land, sea, The army has created a force for recapturing islands modelled on
and air forces, as well as other war potential”, stands. In practice, it America’s Marine Corps. At the base of this new Amphibious Rap­
matters less than it did, owing to changes in the laws governing id Deployment Brigade on Kyushu, soldiers train to swim with
the sdf passed in 2014 and 2015. In the past, it could use force only 45kg packs and practise escaping from capsized troop carriers.
in response to a direct attack. The new framework allows it if the “It’s different from the cold­war period,” says General Hirata Taka­
Diet deems a situation an “existential threat”. “Some people focus nori, the brigade’s commander. “We are the first responders now.”
on the limits,” says Richard Samuels, a security expert at mit. “But The shift is a work in progress. “This is not enough firepower,”
those are pretty flexible limits: an existential threat is what you admits General Yoshida. Defence spending has grown since 2010,
call an existential threat.” but not at the pace of China’s (or even South Korea’s). The sdf is of­
One result of the new laws is more space to plan realistically. ten like a football team practising without a ball. On Amami­Oshi­
During the cold war, Japan and America had a combined opera­ ma, the site of a new missile base, drills stop before the firing be­
tions plan for what to do in a conflict with the Soviet Union, but it gins; to practise shooting missiles, troops must travel to America.
was largely worthless because it considered only a scenario in Decision­making is still too slow. By the time Japan got planes to

012
 6 Special report Japan The Economist December 11th 2021

Afghanistan to evacuate personnel after America’s withdrawal, al­ America might try to learn from Japan on
most nobody was left to be picked up. trade policy as well. Where Japan was once
Yet “Japanese capability is not inconsequential”, says Sheila The delicate a laggard, it has undergone a dramatic evo­
Smith, author of “Japan Rearmed”. The submarine fleet has grown balancing act lution since deciding to join the Trans­Pa­
from 16 to 22, making a difference to Chinese planning. Last year cific Partnership (tpp) in 2011, and ulti­
with China will
Japan and Australia agreed to let their forces operate in each oth­ mately rescuing it when America under Mr
er’s territory—the first such pact with a country other than Amer­ be harder to Trump pulled out in 2017. “We saw Japan
ica. Negotiations over a similar deal with Britain began after the sustain transform from rule­taker—doing what it
recent visit of the aircraft­carrier Queen Elizabeth. Warships from was pressured to do—to rule­maker,” says
Germany and the Netherlands also called by this year, and French Wendy Cutler, a former deputy United
forces joined Japanese­American exercises for the first time. Co­ States trade representative.
operation with India has blossomed through the Quad club. “The Japan’s new leadership in the region is facing its first real test
fact that India is active in the Quad—a lot of that has to do with Ja­ with duelling bids from China and Taiwan to join what is now the
pan,” says C. Raja Mohan, an Indian foreign­affairs expert. cptpp. It is indicative of the trials that await in the Reiwa era. The
Japan has played a similar role in South­East Asia. “Of all the delicate balancing act with China—deterring but not provoking,
asean dialogue partners, Japan understands asean the best,” says enjoying the fruits of its market while denouncing the ills of its
Bilahari Kausikan, a former senior Singaporean diplomat. Though politics—will be harder to sustain. Officials reckon that Xi Jinping
China’s Belt and Road Initiative has attracted more attention, Japa­ has not yet decided what to do with Japan. But they worry that may
nese companies and government agencies have quietly worked to change, especially if China’s economy stalls. Japan remains an
build a big stock of investment in asean’s infrastructure. Those in ideal target for nationalist passions: in China, memories of its
the region have noticed: polls show Japan is the most trusted big wartime atrocities are still potent.
power among South­East Asians. However, Japan’s new activism abroad will also be significantly
That is not true in South Korea. In 2015 the two agreed that Ja­ constrained by its own domestic limitations. It has chosen to be­
pan should apologise and pay compensation to Koreans held as come more proactive internationally at a time when its relative
sex slaves by its imperial armed forces, but South Korea later economic strength is slipping. Its economy is still the world’s
backed off that pact. There is plenty of blame for poor relations all third­largest. But the trajectory will force difficult choices about
round. Yet in South­East Asia “the second world war is a non­is­ priorities. Back on Yonaguni, China is not the only potential disas­
sue”, says Mr Kausikan. It sometimes helps that Japan does not ter on Mr Itokazu’s mind. n
press too hard on human rights, an approach equal parts strategic
and self­serving. For some, Japan seems a more reliable partner
than America. “Americans only talk,” says Mr Mohan. “The Japa­ Climate policy
nese are the ones who built it all—they have the experience, mon­
ey and political skill to move things in the region.”
From Japan’s perspective, America’s approach to South­East
Asia is too inflexible. The Americans avoid state­owned enterpris­
A chequered record
es, but in much of Asia, it is hard to find purely private­sector pro­
jects, says Maeda Tadashi, governor of the Japan Bank for Interna­
tional Co­operation. Emphasising competition between democra­
cy and authoritarianism impedes closer co­operation with coun­ OMACHI
tries such as Vietnam, a communist dictatorship that has an Prepared for disaster, unprepared for climate change
important strategic role. Demanding allegiance to cold­war­style
blocs is anathema to many. “They don’t like to be forced to choose
between China or America,” says Kitaoka Shinichi, president of
the Japan International Co­operation Agency.
K arashima yukari sits before a colour­coded map. She points
out homes that were inundated by floods in Saga prefecture in
August, for the second time in two years. Ms Karashima, who
Nor, for that matter, does Japanese business. “I do not want to works at the Peace Boat Disaster Relief Volunteer Centre, a non­
be on the us side,” says Mr Yanai. “I do not want to be on China’s profit, spends much time rushing to scenes of crisis, staying long
side either.” China accounted for 22% of Japan’s exports in 2020, after the television cameras have gone, scrubbing mould from wet
while America took 18.4%. That has informed the government’s walls and training residents to prepare for the next disaster.
approach to decoupling, which is decidedly selective. Mr Amari, There is plenty to keep her busy. Japan is a “department store of
who has spearheaded economic­security policy, says Japan’s focus natural hazards”, says Nishiguchi Hiro of Japan Bosai Platform, a
is on reducing risks from “choke­points”, such as medical equip­ group of firms that develop disaster­related technologies. Few
ment and semiconductors. tsmc, a big Taiwanese semiconductor countries have been shaped so much by hazards and disasters. Be­
manufacturer, was lured this year with big subsidies to build a sides earthquakes and tsunamis, there are typhoons, floods, land­
foundry in Japan. slides and volcanic eruptions. Japan has had to learn to live with
More sensitive industries are girding for further divisions. Na­ risks, making it a laboratory for resilient societies. “The concept of
kajima Norio, boss of Murata, a manufacturer of high­end elec­ resilience is key to what others can learn from Japan,” says Rajib
tronic components that once counted both Apple and Huawei as Shaw, a disaster expert at Keio University in Fujisawa.
big customers, reckons the worst case may mean developing sep­ As the threat from natural hazards grows, from climate
arate supply chains or even separate legal entities to work for cli­ change­fuelled fires to zoonotic pandemics, the world must live
ents on both sides. Less sensitive industries continue to press with more risk. The countries that fare best will be the resilient
ahead. Mr Yanai’s Uniqlo has just opened a flagship store in Bei­ ones. In “The Resilient Society”, Markus Brunnermeier, an econo­
jing and plans to build 100 new stores in China every year. mist from Princeton University, argues that “Resilience can serve
Japan can teach America lessons on “how you diminish some as the guiding North Star for designing a post­covid­19 society.”
vulnerabilities, while still not talking about wholesale decou­ The biggest lesson from Japan is the value of preparation. As
pling”, says Mireya Solis of the Brookings Institution think­tank. Ms Karashima says, “It’s too late if you start acting after the disas­

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 The Economist December 11th 2021 Special report Japan 7

ter happens.” That this sounds banal in much of the world makes ngo density is a better predictor of population recovery rates than
its absence more striking. Of $137bn provided in global disaster­re­ income or public spending, Mr Aldrich contends.
lated development assistance from 2005 to 2017, 96% was spent on The Reiwa era will test these personal ties. One reason is cli­
emergency response and reconstruction, less than 4% on disaster mate change. On Yonaguni, typhoons have become “highly unpre­
preparedness. Donors prefer high­profile rescue work; the media dictable”, says Mr Itokazu. Perversely, Japan’s history of disasters
cover disasters when they happen, not when they do not. Many has made it a laggard on climate change. With so many old haz­
governments treat prevention as a cost, not an investment. But ards, the new ones have not generated as much urgency as else­
natural hazards are not always disasters. “The hazard becomes a where, laments Koizumi Shinjiro, a former environment minister.
disaster when the coping capacity is too weak,” says Takeya Kimio, The Fukushima meltdown has kept environmentalists focused on
an adviser to Japan’s overseas development agency. In 2015 he pro­ anti­nuclear campaigns, rather than climate change.
moted the “Build Back Better” concept in the un Sendai Frame­ The nuclear disaster also paralysed energy policy. Although the
work, a global pact on disaster­risk management. government has pledged to reach net­zero emissions by 2050, it
It is a lesson learned through bitter experience. The Ise Bay Ty­ has yet to provide a credible plan for how to get there. Its interim
phoon, which killed 5,000 people in 1959, prompted the first di­ maps depend on restarting large numbers of mothballed nuclear
saster­management reforms. Another round came after the Kobe plants, an unlikely prospect given popular resistance. Leaders
earthquake in 1995, which killed 6,500 and left more than 300,000 have avoided frank discussions with the public about the trade­
homeless. The government now has pre­arranged contracts for re­ offs. Meanwhile, Japan will continue to consume lots of fossil fu­
pairing infrastructure, allowing post­disaster reconstruction to els, including coal.
begin fast without going through cumbersome procurement pre­ Another difficulty is the “changing landscape of vulnerability”,
cesses, says Sameh Wahba, of the World Bank’s disaster­manage­ says Mizutori Mami, head of the un office for disaster­risk reduc­
ment programme. Local governments stockpile essential goods in tion. The elderly, of whom Japan has growing numbers, are at
schools and community centres. Parks have benches that can be most risk. That was a lesson from the floods two years ago, says Ms
used as stoves and manholes that become makeshift toilets. Karashima; this year, her team had lists of those who could not
Across Japan, every day as dusk falls, folk tunes spill out from reach evacuation shelters and needed help. The pandemic led
neighbourhood speakers—a charming element of local life, but al­ even more people to remain at home. Adapting to a future when
so a means of testing alert systems. multiple hazards may hit at once will require a flexibility that the
Japanese system lacks.
Building safer Earthquakes remain the greatest threat, particularly in and
The government focuses on engineering­based solutions. Such around Tokyo. The government reckons that in the next 30 years
investment, along with improvements to building codes, has re­ there is a 70­80% chance of a severe earthquake and tsunami in
duced risks. That most structures built to new standards with­ the Nankai Trough, a zone south of Japan’s main island. It may
stood the 9.0 magnitude Great East Japan Earthquake in 2011 that strike where the population and economy are concentrated, crip­
triggered a big tsunami and nuclear meltdown is testimony. “If not pling industry and roiling global supply chains. The death toll
for Fukushima, it is the biggest averted disaster in history,” reck­ could reach as many as 323,000 (the earthquake and tsunami in
ons Francis Ghesquiere of the World Bank. 2011 took some 20,000 lives); one study reckons it could lop 11.1%
But one cannot discount Fukushima. This nuclear meltdown off gdp (a loss 4.5 times bigger than in 2011). “It would challenge
points to another lesson: that over­reliance on technology can the survival of Japan as a state,” says Fukuwa Nobuo, director of
create a false sense of security. Officials who believed sea walls the disaster­mitigation research centre at Nagoya University. It
would protect them ignored scientists’ warnings about the plant’s would also devastate one of the world’s great cities, again. n
location near a major fault line. Regulators who were too cosy with
the nuclear industry overlooked the placing of the plant’s backup
generators in a basement. When the earthquake knocked out the
main electricity lines, the tsunami overcame the sea walls and
flooded the generators, cutting power to the water pumps, leading
the reactors to overheat. Even the best hardware can fail.
The software is as essential as the hardware. When Shimizu
Mika, a resilience expert at Kyoto University, was a child in Kobe in
1995, citizens were unprepared. “We used to have a drill in schools,
duck and cover, and then nothing else,” she recalls. Now people re­
alise disaster risk is everyone’s business. A cabinet­office survey
before the pandemic found a majority had discussed household
disaster plans in the preceding year or two. Both the private sector
and civil society, which blossomed after Kobe, have invested in di­
saster preparedness. The key is making this participatory and citi­
zen­led; the goal is not simply imparting knowledge of evacuation
routes, but strengthening ties within a community.
Research suggests such efforts are more than feel­good fests.
When disaster strikes, social capital makes a big difference in sur­
vival and recovery rates, argues Daniel Aldrich, director of the re­
silience­studies programme at Northeastern University. He points
to the neighbourhoods of Mano and Mikura in Kobe. Both had
similar demographic and physical characteristics, but Mano had
more social capital, thanks to a history of activism and communi­
ty events. When the earthquake hit, residents in Mano self­organ­
ised to fight fires; those in Mikura did not. More than 15 years later, Ducking away from global warming

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 8 Special report Japan The Economist December 11th 2021

to impose zoning as in the West, as they had after the Great Kanto
Tokyo
Earthquake of 1923. But the government’s resources were too lim­
ited and Tokyo’s growth too rapid to control the process. Japan in­
The big city stead developed lax zoning codes, which allow pretty much any­
thing to be built, rather than prescribing what is permitted. His­
torically, this model “was part of a modernist ethos to separate
functions, to say work happens here, living happens here”, ex­
plains Mohsen Mostafavi of Harvard’s Graduate School of Design.
Perhaps surprisingly, the world’s biggest city is also one
In recent years there has been a “paradigm shift” in how Tokyo
of its most liveable
is perceived, says Christian Dimmer of Waseda University, Tokyo.

“O nly thumbs stood up from the flatlands—the chimneys of

bath­houses, heavy house safes and an occasional stout
building with heavy iron shutters,” wrote Russell Brines, the first
Scholars find evidence that, as Tokyo grew, neighbourhoods de­
veloped gradually, and became more equal, rather than stratified.
In one study, Benjamin Bansal, a Bangkok­based independent re­
foreign journalist to enter Tokyo after the second world war. From searcher, shows that differences in living space per head and other
a pre­war population of 7m people, only 3.5m were left. As Tokyo indicators between the city’s 23 central wards have declined dur­
rebuilt, the city was rife with violence and slum­like living condi­ ing Tokyo’s rapid growth from 1955 to 1975. Activists in the West al­
tions. Ahead of the 1964 Olympics, officials rushed to spruce up so note that Tokyo has avoided the housing crises of many rich
the infrastructure and clean up the streets, clamping down on countries; some reckon permissive zoning made a big difference.
then­widespread practices such as public urination. What once were problems now seem virtues. “[Mixed­use
Tokyo is now the world’s largest city, with 37m residents in the neighbourhoods] have proved very resilient,” says Murayama Aki­
metropolitan area and 14m in the city proper. It is also one of the to at the University of Tokyo. Consider the
world’s most liveable, with punctual public transport, safe neigh­ work of Jane Jacobs, an American urbanist
bourhoods, clean streets and more restaurants and Michelin stars who railed against planning in the 1960s.
than any other. In the liveability index of the Economist Intelli­ Tokyo’s liveability “Intricate minglings of different uses in
gence Unit, our sister group, Tokyo comes joint fourth, but its pop­ is a product of cities are not a form of chaos,” she wrote in
ulation is larger than the combined populations of the others (Ad­ “The Death and Life of Great American Cit­
elaide, Auckland, Osaka and Wellington). “It’s possible to have a
planning’s ies”. “On the contrary, they represent a
liveable city at any scale—Tokyo proves that,” says Gabriel Metcalf, successes but complex and highly developed form of or­
at Committee for Sydney, an Australian think­tank. also its failures der.” Tokyo has many qualities she cham­
It offers lessons to developing cities elsewhere. In 1950, 30% of pioned, says Mr Dimmer: “Social capital,
the world’s population was urban; by 2050, 68% will be. Much re­ eyes on streets, self­management and self­
maining growth will be in megacities of more than 10m in Asia government, people of many walks of life
and Africa. There are 33 such cities now; by 2030 there will be 43. rubbing elbows in public spaces, a mix of old and new buildings.”
As Tokyo grapples with what to do when cities age and shrink, it The pandemic underlined the value of such qualities. “We be­
can also serve as a case study for other rich cities. came aware of what is there in the square mile around us,” says Ra­
Tokyo’s liveability is a product of planning’s successes but also hul Srivastava, co­founder of Urbz, a Mumbai­based research col­
its failures, argues Jordan Sand of Georgetown University. One lective. For Mr Srivastava and Matias Echanove, another co­foun­
success was public transport. After the Meiji restoration, the gov­ der, such qualities make Tokyo a model for megacities. Their study
ernment put rail ahead of roads, expanding networks through the of Tokyo informs their work in Dharavi, a poor part of Mumbai,
city and then underground. Even as large firms in America built where they advocate what Mr Echanove calls a shift from a “less is
headquarters in suburbs, in Japan they clustered around transport more” ethos that sees poorer neighbourhoods as problematic dis­
hubs, incentivising the use of trains and subways, says Okata Jun­ tricts to be razed and rebuilt, to a “mess is more” ethos that em­
ichiro of the University of Tokyo. That helped make Tokyo poly­ braces gradual, in situ development.
centric, with many hubs, not one. Tokyo is still growing, but it is also ageing and its population is
Around those hubs grew dense, mixed­use neighbourhoods. projected to decline after 2025. “The urbanisation process is fi­
That was the planning “failure”. After the war, city planners sought nite,” argues Andre Sorensen of Toronto University. “Japan is the
first country to see that.” The shrinkage has already begun in To­
kyo’s suburbs, where developers once attracted hordes of baby­
boomers to freshly built housing complexes. Now, the boomers
are getting old and their children have left. Vacant properties,
known as akiya, are proliferating. Accessing public transit has be­
come more difficult for the elderly.
Technology can help. As Tokyo thinks about “downsizing” pub­
lic services, big data will matter, says Koike Yuriko, its governor.
The city already has granular readings from smart water meters:
during football matches at the Olympics, officials could tell when
half­time hit from the uptick in flushing toilets. Such data may
help make water provision more efficient, and could even be used
to flag potential problems with elderly residents who live alone,
according to Ms Koike.
Some suburban communities have tried to attract younger res­
idents with promises of cheap property and plentiful space. A
handful of developers have shifted to trying to revive such areas.
But the sad reality is that some suburbs will survive and others de­
Where the living is easy cay. That process is even more obvious in distant regions. n

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 The Economist December 11th 2021 Special report Japan 9

conditions; two individuals may be the same age, make the same
money and live on the same street, yet have different mental and
physical health. “We often miss the context,” says Kudo Shogo of
Akita International University. He is one of scores of young out­
siders who have been welcomed to Gojome, which was a trading
hub at the crossroads of farm districts. Comparable farm­focused
neighbours have been less open to incomers.
That makes designing national policy difficult. “There’s not a
one­size­fits­all model,” says Iio Jun, a political scientist at grips.
While the national government is responsible for finance, includ­
ing pensions, the new map of life is best drawn from the ground
up. Many ideas come from listening to citizens, says Ms Akiyama.
“They know what the issues are—and many times they know how
to solve them.”
One issue is how ageing is discussed: as a problem or a burden.
“Older people feel they’re not needed by society,” laments Hata­
keyama Junko, the 70­year­old head of Akita Partnership, a non­
profit that manages a community centre. Longevity is not itself a
problem—it should be celebrated. The problems arise when peo­
ple live long but unhealthy, lonely, or dependent lives. The goal in
Japan has shifted from increasing life expectancy to enhancing
the “healthy, autonomous life expectancy”, says Ms Akiyama.
This means finding ways for old people to keep working. Near­
ly half of 65­ to 69­year­olds and a third of 70­ to 74­year­olds have
jobs. Japan’s gerontological society has called for reclassifying
those aged 65­74 as “pre­old”. Ms Akiyama speaks of creating
“workplaces for the second life”. But the work of the second life
Demography
will differ from that of the first; its contribution may not be easily
captured in growth statistics. “We have to seek well­being, not on­
The old country ly economic productivity,” Ms Akiyama says. Experiments
abound, from municipalities that train retirees to be farmers, to
firms that encourage older employees to launch startups. The el­
derly “want dignity and respect”, says Matsuyama Daiko of the Tai­
GOJO ME
zo­in temple in Kyoto, which has a “second­life programme” that
Japan has aged faster than anywhere, but is learning to cope
offers courses for retirees to retrain as priests.
The other key is staying healthy, physically and mentally. Wis­

E ver since 1495 residents of Gojome, a town in northern Japan,

have gathered for a morning market. On a recent weekday,
along a street of closed shops with almost no people, elderly sell­
er municipalities focus on preventive care. At the Kadokawa Care
Centre, a sleek facility in a former school in Toyama, north­west of
Tokyo, septuagenarians, octogenarians and nonagenarians splash
ers lay out their autumnal wares: mushrooms and chestnuts, okra, through a swimming pool and pump away at exercise machines.
aubergines and pears. It was not always so empty, sighs Ogawa Ko­ “If not for this place, I’d be in a nursing home,” gushes Kyoda Take­
sei, who runs a bookshop on the street. He points to pictures his toshi, an 82­year­old. The socialisation is no less important. “It
father took that show the scene packed with shoppers. cost a lot to build this place, but it was worth it,” says Saito Yonea­
The population of Gojome has shrunk by half since 1990. More ki, 80, before skipping off to join friends in the sauna. Although Ja­
than half its residents are over 65, making it one of the oldest pan’s healthy life expectancy trails overall life expectancy by eight
towns in Akita, the oldest prefecture in Japan, which is in turn the to 12 years, the gap fell slightly between 2010 and 2016.
world’s oldest country. Yet Gojome is less an outlier than a portent.
According to the un, every country is experiencing growth in the
size and proportion of its elderly population; by 2050 one in six
people in the world will be over 65, up from one in eleven in 2019. Rise and fall
The un also projects that 55 countries, including China, will see
their populations decline between now and 2050. Japan, total population*, m Old-age dependency ratio
Demographic change has two drivers often lumped together: Population aged 65 and over as % of total
rising longevity and a falling birth rate. Their convergence de­ Showa Heisei 140 50
era Reiwa
mands “a new map of life”, says Akiyama Hiroko, founder of the 120 South Korea
University of Tokyo’s Institute of Gerontology. Infrastructure 40
100 Japan Italy
created when the population was younger and the demographic 30
80
pyramid sturdier must be redesigned, from health care to housing
to transport. The new reality demands a “completely different way 60 United 20
Germany States
of thinking”, says Kashiwa Kazuyori, head of Gojome’s town­plan­ 40
China 10
ning department. When he started work in the 1970s, the focus 20
was on growth. Now it is about managing decline. Forecast 0 Forecast 0
Part of the challenge is that demographic change affects every­ 1920 50 2000 50 65 1950 75 2000 25 50 75 2100
one differently. Two towns or regions may look similar from a dis­ Sources: UN World Population Prospects; *1945-71 population excluding
tance, but have distinct historical, cultural and environmental National Institute of Population and Social Security Research Okinawa Prefecture

012
 10 Special report Japan The Economist December 11th 2021

The birth rate is harder to change. It fell to 1.34 in 2020, far be­
The economy
low the 2.1 needed to keep a population stable. Even if Japan could
raise it, rural areas would still struggle. One study reckons more
than half of Japan’s 1,700 municipalities could vanish by 2040, as
young people, especially women, leave. Yet though a return to
Stronger than many realise
growth is unlikely in most regions, there is an alternative to out­
right disappearance: a critical core of newcomers. Even a handful
of transplants can revitalise an ageing town without replacing the
population entirely, notes Mr Iio.
Not bad, but could be better
Gojome is a good example. Although the population has been
shrinking, “a new wind is blowing in the town”, says Watanabe Hi­
kobe, its mayor. Over the past decade a small group of young out­
siders has arrived, drawn by visions of a slow, bucolic life, and the
“T he most decisive mark of the prosperity of any country is
the increase of the number of its inhabitants,” wrote Adam
Smith in “The Wealth of Nations” in 1776. Later David Ricardo and
chance to try new models of untethered work and communal liv­ Thomas Malthus traded barbs over whether the food supply would
ing. Yanagisawa Ryu, a 34­year­old with a computer­science de­ keep up. By 1937 John Maynard Keynes was warning of future pop­
gree from Japan’s leading university, ditched his job in Tokyo and ulation decline, with deleterious economic effects.
became a “social entrepreneur”. He oversees Babame Base, a busi­ Japan is the canary in this coal­mine. In the 1980s its booming
ness hub in an empty school in Gojome that hosts a graphic­de­ economy struck fear in the world. After the bubble burst in the
sign studio, an ecotourism outfit, a local doctor and a firm that 1990s, public debt ballooned and deflation set in. Many in the West
trains farmers to use drones, among others. said Japan’s debt was unsustainable and the Bank of Japan (boj)
Such “urban migrants” are still a relative rarity. Mr Yanagisawa should do more to boost inflation. In 2013 the boj’s governor, Ku­
admits his university friends find his lifestyle choices “weird”. But roda Haruhiko, embarked on dramatic monetary easing. The debt
in many ways, they are the vanguard. “Rather than trying to re­ hovered around 230% of gdp. A strange thing ensued: no fiscal cri­
create the past, we have to think: what kind of community, what sis struck, nor did inflation come near the 2% target. “The stan­
kind of town do we want now?” says Mr Kudo. They are not the on­ dard textbook on macroeconomics needs an additional few chap­
ly outsiders moving in (see box below). n ters—it doesn’t capture the problems Japan faced,” says Shirakawa

Letting them in
From a low base, the ranks of foreign workers are growing fast

T akeuchi masanobu has a message for

his compatriots: “If you order some­
thing, it arrives on time, if you go to the
Local leaders express more openness to
foreigners than the stereotype of Japan as
a shimaguni (island nation) suggests. “It’s
here,” says Mr Itokazu, mayor of Yonaguni.
“It doesn’t matter which country you’re
from, we are all descended from apes.”
convenience store, you have cheap, good, key to bring in people from outside the Forward­looking business leaders
food—that’s all sustained by foreigners.” prefecture, including those from overseas, agree. “This is the time to define a better
Across Japan, foreigners are key in in­ to bring in new perspectives,” says Satake immigration policy,” says Mr Yanai, Fast
dustries from farming to retailing. Viet­ Norihisa, governor of Akita. “People with Retailing’s founder. Attracting high­
namese can be found in the fields of Yona­ different backgrounds make Tokyo only skilled workers is “key” to future compet­
guni and the factories of Hokkaido. Chi­ more attractive,” says Ms Koike, its go­ itiveness, says Niinami Takeshi, boss of
nese and Uzbeks man counters in Tokyo’s vernor. “If they’re sincere and good peo­ Suntory, a drinks firm. Noda Seiko, from
convenience stores. In Gunma Nepali staff ple, I have no concerns about them com­ the ldp’s liberal wing, says it is time to
help ageing proprietors of inns carry the ing—give them land and let them live consider ending the idea of “Japan as a
futon. “They are the labour greasing the country for Japanese people”. The public is
wheels of Japan’s convenience,” says Mr becoming more open to foreigners. Famil­
Takeuchi, a lawyer in Fukuoka, where one On the up iarity helps. Nearly 32m foreigners visited
in every 55 workers is foreign, up from one Japan, number of foreign workers, m Japan in 2019, up from fewer than 7m a
in every 204 in 2009. 1.75 decade earlier.
Japan may lack an immigration policy, Yet “there’s a limit to what local gov­
but plenty come in by stealth. The number 1.50 ernments can do,” laments Toyama’s
of foreign workers has trebled in a decade, 1.25 governor, Nitta Hachiro. Businesses must
albeit from a low base. Yet the system is handle their own language training and
rife with abuse, shown by the death this 1.00 social integration. Many foreigners are left
year of Wishma Sandamali, a 33­year­old 0.75 without the support they need. The gov­
Sri Lankan woman detained for overstay­ ernment “leaves the doors wide open for
ing her visa. The pandemic did not help: 0.50 foreigners, but refuses to position Japan as
border controls left thousands stranded 0.25 an ‘immigration nation’,” says Hisamoto
abroad. The government has hinted that it Kizo, Kobe’s mayor. Presented with a
may allow low­skilled workers to stay 0 choice, voters may decide the risks of
permanently, but it has not taken up the 2008 10 12 14 16 18 20 immigration outweigh the benefits. But a
cause of broader reform. Source: Ministry of Health, Labour and Welfare frank national discussion is long overdue.

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 The Economist December 11th 2021 Special report Japan 11

nation is far more real and persistent than we thought.”

Into the trough Once inflation expectations are anchored around zero, raising
Ten-year government-bond yields, % them is hard. Moreover wages have not risen much, despite a tight
15 labour market. Unions prefer stability of employment to wage ris­
Britain
es, reckons Nakaso Hiroshi, a former deputy governor of the boj.
France 12 Companies have gradually taken on more “non­regular” workers
Germany on part­time contracts; they account for 40% of the labour force,
United States 9 twice as much as in 1990. Perverse incentives may help depress
Italy
Canada
their wages: many women limit their hours or incomes to secure a
6
tax deduction for married couples earning below a threshold.
3 Ageing, shrinking populations may also be weighing on de­
mand and thus inflation. For Mr Shirakawa, that is a vindication of
Japan 0 sorts. He argued at the boj that deflation was more a symptom of
factors causing low growth, not the cause. In a new book, “Tumul­
-3 tuous Times”, Mr Shirakawa says the impact of demographic
1992 95 2000 05 10 15 21 change on growth “is still under­appreciated”.
Source: OECD Overall growth has remained sluggish, but growth per head has
recently been comparable with others in the g7. Unemployment
has been minimal, longevity has increased and inequality has
Masaaki, Mr Kuroda’s predecessor. stayed relatively low. “Maybe Western economists who were so
Many rich countries now face similar “secular stagnation”: low critical of Japan circa 2000, myself included, should go to Tokyo
inflation, low interest rates and low growth. Although higher in­ and apologise to the emperor,” Paul Krugman, an economist,
flation has emerged recently, financial markets suggest secular tweeted in 2020. “Not that they did great; but we did much worse.”
stagnation will return soon. Demography is a big factor; Japan Yet Japan could still do better. Public spending should be
simply started ageing and shrinking earlier. As Japan has adapted aimed more at improving long­term growth. Economists in Tokyo
and others have become more like it, some economists are seeing fret that the government has wasted its pandemic stimulus on
its economy in a new light. handouts: a study by Hoshi Takeo of the University of Tokyo finds
Debt has not turned out to be such a problem. “What we that fiscal support in 2020 was more likely to go to companies that
thought used to be fiscal limits are no longer fiscal limits,” argues were already struggling before covid­19.
Adam Posen, of the Peterson Institute for International Econom­ Boosting productivity could help to offset the impact of the
ics (piie) think­tank. “[Japan] has forced people to confront reali­ shrinking population. Mr Yoshikawa reckons that innovation is
ty: the interest rate can stay below the growth rate for very long pe­ key to growth, and that ageing creates new problems that entre­
riods.” The public debt has been above 100% of gdp for almost 25 preneurs can solve. Generational shifts may help. While many still
years without causing a crisis. prefer stable sarariman (salaryman) jobs in big firms, some of to­
It helps that the country borrows in its own currency, the gov­ day’s brightest graduates go into startups. “There is a burgeoning
ernment has big financial assets and the boj holds a big share of wave—they are a different species,” says Mr Niinami. But structur­
the debt. But as David Weinstein of Columbia University argues, al reforms are necessary too, particularly to the inflexible labour
Japan has also managed to contain spending. Since 2000, he market. It should be easier for workers to move between firms and
writes in a paper with Mark Greenan, spending per head on the el­ industries, and harder for firms to exploit non­regular workers.
derly has actually fallen. “There’s a quiet functionality that people Yet pressure for reforms is lacking, partly due to resistance
miss,” says Mr Weinstein. “Markets are sanguine because Japan from vested interests, but also because life remains comfortable
has a rare ability to adjust.” With low marginal tax rates, there is al­ enough. “It’s not an acute disease, it’s chronic,” says Mr Nakaso.
so room to raise revenues. “You don’t really feel the pain, but it impacts your health in the
Some still fear what would happen if interest rates were to go long­term.” This could be treated. As Mr Posen puts it, “There are
up. The argument that Japan need not worry about its debt because 10,000 yen notes lying on the ground waiting to be picked up.” Will
it can respond by levying taxes is “too academic”, says Yoshikawa Japan’s leaders grab them? n
Hiroshi, president of Rissho University. Raising consumption tax­
es is a political loser. Policymakers are also haunted by the spectre
of external shocks that create new fiscal needs. Recently Yano Koji,
a vice­minister of finance, caused a stir with a column comparing An average performer
the country’s fiscal situation to the Titanic. GDP per person*, average annual % increase

1990-99 2000-09 2010-19

Seeking fiscal space
Yet some reckon fiscal policy ought to be used more forcefully. 0 0.5 1.0 1.5 2.0
Many now regret two ill­timed consumption­tax increases in 2014 Germany
and 2019. Mr Abe’s preferred candidate in the recent ldp leader­ United States
ship race called for postponing the government’s primary­balance
target until the boj hits its inflation target. In late November Mr Japan
Kishida’s government announced a huge fiscal stimulus worth Britain
¥55.7trn ($483bn).
Getting inflation up has not proved easy. Under Mr Kuroda, the Canada
boj expanded quantitative easing, adopted inflation targeting, France
and purchased a wider variety of assets. That helped pull the coun­
try out of its mild deflation, but only barely. “We misunderstood Italy
the inflation issue,” says Mr Posen. “It turns out that secular stag­ Source: OECD *At constant prices

012
 12 Special report Japan The Economist December 11th 2021

which drives some into business or civil society, not politics.

“People are kind of giving up on the country,” says Mr Yanagisawa
from Gojome. “Maybe it’s not our issue to think about the country,
maybe we should just think about the community.”
The absence of competition creates little incentive for political
leaders to take risks. Politicians often lament the lack of “animal
spirits” in Japanese business. But the Diet could use some too. Lo­
cal leaders, especially in ageing regions, feel more urgency. “We
can’t just rely on old models or past experiences,” says Mr Satake,
Akita’s governor.

Enter Kishida
Mr Kishida, the new prime minister, touts a “new model of capital­
ism”. But so far it looks like the old one. He also likes to boast of his
listening ability, doubtless an admirable quality. What Japan real­
ly needs are leaders with vision. Whether Mr Kishida and his suc­
cessors can demonstrate this will determine if it emerges from the
Reiwa era as a model or a cautionary tale.
They should keep three risks in mind. One is external shocks,
such as natural hazards and nasty neighbours. A second is inter­
nal: today’s mild frustration could turn into something worse. Ja­
pan has largely avoided populism and polarisation. But nothing
makes it immune to internal divisions. Only 60 years ago Japanese
fought in the streets over the security treaty with America. And
then there is the risk of aimless drift. Polls find roughly two­thirds
of respondents reckon their lives will be “similar” in the future
(9% think they will get better, 27% that they will get worse). Com­
placency could yet rob the country of a brighter future.
The world, in turn, would be wise to pay more heed. Japan used
to capture attention mainly as a threat, first in military terms, then
Looking ahead
in economic ones. Since its “lost decades”, it has fallen out of the
headlines. It now generates global interest mostly as a cultural dy­
The future namo, a travel destination or a source of tales of “weirdness”. But
supposedly unique Japanese phenomena have a habit of appear­
ing elsewhere. Excessive focus on the mystique of Japaneseness
obscures how the country is changing, and how policy choices
shape this.
It is time to retire the narrative of a stagnant, isolated country
It would be better with younger and more dynamic leaders
in terminal decline. Japan is central to this century’s geopolitics;

T he first general election of the Reiwa era went smoothly. Vot­

ers shuffled into polling booths, cast ballots, and gave the ldp a
victory, as they have done all but twice since the party’s founding
its international role belies the outdated stereotypes. Big disasters
forced the country to change; as a result, it has become more resil­
ient to natural hazards than most. It does not have answers to all
in 1955. In one sense, it is a story of stability, despite frustration ov­ the challenges of demographic change or secular stagnation, but it
er the pandemic and worry about the future. Yet in an election has so far done better on the front line than is often recognised.
with little competition, it is unclear what voters chose. Japan should be looked upon as a laboratory for studying
In the past, competition came from factions within the ldp, shared challenges. The world has an opportunity to draw insights
says Gerald Curtis of Columbia University: “There was lots of cor­ from its successes and its failures. It would be better off if it assim­
ruption and money politics, but there was a real dynamism.” But ilated more from the outside world. The lessons of the Reiwa era
factional influence has waned. The opposition offered compe­ will differ from those of Showa or Heisei, but they will be no less
tition for a time, even winning power from 2009 to 2012. But after valuable. Japan is no longer Number One, but it still has plenty for
the disaster on its watch, it has become like the akiya that dot Ja­ the world to learn from. n
pan’s countryside: no price is low enough to entice voters. The
marketplace for ideas in Japanese politics has broken down.
Without a threat of losing power, any ruling party becomes un­ acknowledgments A list of acknowledgments and sources is included in the online version
accountable. Demographic change exacerbates things: some 20% of this special report
of local politicians are elected without a contest. The result is a offer to readers Reprints of this special report are available, with a minimum order
government that, in many ways, does not look or think like its of five copies. For academic institutions the minimum order is 50 and for companies 100.
people. Less than 10% of new Diet members are women; just three We also offer a customisation service. To order, contact Foster Printing Service:
Tel: +1 866 879 9144; email: economist@fosterprinting.com
out of 21 cabinet ministers are. Only two are under 50. Dynastic
politicians still dominate. For information on reusing the articles featured in this special report, or for copyright queries,
Society is changing faster than established powers. Japan is in contact The Economist Rights and Syndication Department: Tel: +44 (0)20 7576 8000;
email: rights@economist.com
the midst of a quiet transformation, argues Hosoya Yuichi, a polit­
ical scientist: “There is a new wind, but within an old­fashioned more special reports Previous special reports can be found at
structure.” On social issues from gay rights to family law, the ldp is Economist.com/specialreports
out of step. Many voters feel they cannot change the system,

012
 Middle East & Africa The Economist December 11th 2021 43

Citizenship in the Gulf Still, even these small steps break a

long­held taboo. In 2013 Sultan al­Qassemi,
A narrow path a member of the ruling family in Sharjah,
part of the uae, published an op­ed urging
the state to naturalise talented foreigners.
It caused an uproar. On social media many
Emiratis replied with a hashtag that trans­
DUBAI AND MANAMA
lates as “this writer does not represent me”.
Give us your doctors, your inventors, your huddled scientists,
The steps raise complicated questions
say the Gulf states
about citizenship and identity in the gcc.

O ne day soon Kamal will have to leave.

The Indian expat has done office jobs
in Bahrain since the 1990s. They paid well
that certain foreigners, such as doctors, in­
ventors and scientists, could be nominat­
ed for citizenship. Saudi Arabia said in No­
Even for native­born khaleejis (Gulf Arabs),
citizenship is not a right enjoyed equally. If
a Bahraini man marries a foreign woman,
enough to put his kids through school and vember that it had naturalised an undis­ his wife may apply for his nationality and
provide a modest nest­egg. Retirement closed number of expats. Most Gulf states his kids automatically receive it. Reverse
beckons. Yet he finds the prospect unset­ now offer long­term residence visas that the sexes, though, and no such rights exist.
tling. It means a one­way ticket back to a do not require work. A new scheme in the When a Gulf woman marries a foreigner,
place where he has not lived in decades. uae allows expats to retire in the country their children are typically treated as for­
“I’ll leave a place with all my memories for instead of returning home. eigners. Mothers in Bahrain may sponsor
a country I don’t recognise,” he says. None of this is a “path to citizenship” as them as dependants until they are 18, re­
Such stories are common in the Gulf. Of many liberal democracies would define it. newing their papers every two years; after
the 59m people who live in the six­member Only an elite group is eligible: a talented that, children must secure their own resi­
Gulf Co­operation Council (gcc), about scientist could become an Emirati citizen, dency or leave. “You can imagine, this is­
half are foreigners. Some stay for a few but not the janitor who cleans his lab. The sue leads to a lot of complaints,” says Ali al­
years; others spend entire careers. Almost numbers are tiny. The uae will naturalise Dirazi, the head of Bahrain’s state­run hu­
all, however, arrive with the understand­ only around 1,000 people a year, or 0.01% man­rights agency.
ing that they must eventually depart. of its population. Long­term visas are tied The uae’s new citizenship scheme has
Gulf states have long bristled at the idea to wealth, with requirements for income prompted a rare debate about such things.
of offering citizenship to expats. Locals or investment that exclude most workers. Jawaher al­Qassemi, the wife of Sharjah’s
fear it would change their national identi­ ruler, posted a short comment on Twitter:
ty. Governments are not keen to extend “Naturalisation for the children of female
costly benefits to foreigners. For most for­ → Also in this section citizens. That’s a demand,” she wrote. Oth­
eigners, life in the Gulf involves a string of er Emiratis voiced similar feelings.
44 Who leads the Muslim Brotherhood?
short­term work visas: cease to be produc­ Several Gulf states also have popula­
tive, and you cease to be a resident. 45 Broken promises in Congo tions of so­called bidoon (people “without”
This is slowly changing. In January the papers), who did not register as citizens at
46 Africans and global governance
United Arab Emirates (uae) announced independence. Kuwait has at least 100,000

012
 44 Middle East & Africa The Economist December 11th 2021

of them. They are broadly excluded from

good jobs and social services. Newly mint­ The Muslim Brotherhood
ed citizens will receive rights denied to na­
tives for half a century.
Fratricidal tendencies
Foreigners naturalised in the uae will
AMMAN
be free to live and work in a rich country,
The oldest Islamist movement is riven by infighting
and to travel on a passport that ranks as
one of the world’s most useful. The govern­
ment is vague as to whether they will enjoy
other privileges. Native­born Emiratis re­
W hen hassan al-banna founded
the Muslim Brotherhood in Egypt
nearly a century ago he implored his
Brotherhood. On one side is Ibrahim
Mounir, who succeeded Mahmoud Ezzat
as acting supreme guide (or leader) after
ceive everything from cheaper mobile­ followers to seek “self­sacrifice, not the latter was captured in Egypt last year.
phone plans to interest­free housing personal advantage”. Today, though, they On the other is Mahmoud Hussein, the
loans. Some receive grants of up to 70,000 are struggling to comply. The oldest and former secretary­general, whom Mr
dirhams ($19,000) when they get married. once­powerful Islamist movement has Mounir suspended in October, along
If rights are unclear, so are responsibil­ been tearing itself apart. Leaders in with five other prominent members,
ities. Since 2014 Emirati men have been re­ Istanbul and London exchange insults, over alleged corruption. After rejecting
quired to perform military service. The law accuse each other of corruption or, that decision, Mr Hussein and the five
does not say if naturalised citizens (or their worse, serving foreign spy agencies. members sent out a statement dismiss­
descendants) face the same burden— “Instead of sacrificing themselves they ing Mr Mounir from his post.
though perhaps not, since there seems to are sacrificing the movement,” says Mr Mounir, who lives in London,
be no requirement that they know Arabic. Osama Gaweesh, a former Brother who oversees the Brotherhood’s international
They will be allowed to keep their original lives in Britain. network and has good relations with
nationality, whereas native­born Emiratis There have been arguments within foreign governments. But Mr Hussein,
cannot hold a second passport. Some fret the Brotherhood over strategy and tactics who lives in Istanbul, controls the
the government has created a two­tier ever since its creation. But the discord Brotherhood’s website and its bank
model of citizenship. worsened after Abdel­Fattah al­Sisi, then accounts, and has the keys to its Istan­
The citizenship law is part of a head­ a general, toppled Egypt’s first democrat­ bul­based television network, Watan.
spinning package of reforms implemented ically elected government, led by the Critics accuse him of ousting rivals and
by the uae over the past year. Unmarried Brotherhood, in 2013. Mr Sisi, who is now cutting payments to the families of
couples may now legally live together. president, imprisoned many of the detainees. “He treats the Brotherhood as
Muslims may drink. In November Abu group’s members. Others went into his possession,” says Azzam Tamimi, an
Dhabi, the capital, decided to allow civil hiding or fled abroad. Disagreements Islamist thinker in Jordan.
marriages for non­Muslims. On December sprang up over how to respond to the The unusually public dispute, in­
7th the uae announced that it would shift repression. An “old guard” prioritised the volving smear campaigns on both sides,
the public sector to a Monday­to­Friday Brotherhood’s survival and advocated a has thrown the Brotherhood into turmoil
work week, from Sunday­to­Thursday, pragmatic approach in dealing with the at a time when Sunni Islamists are strug­
bringing it in sync with most of the world Egyptian state. Others favoured a more gling across the Arab world. Elections in
(but out of step with many Arab countries). confrontational stance. Some members Iraq and Morocco swept them out of
Much of this simply legalises reality: turned to violence. government, while strongmen in Tunisia
there are lots of cohabiting singletons and Today the priority for the rank and and Sudan pushed them from power.
carousing Muslims in Dubai. Yet the file, according to several members, is Qatar and Islamist­led Turkey have of­
changes have come with little public de­ getting the Egyptian detainees (some of fered exiled Brothers refuge and support­
bate in a country where space for criticism whom are pictured) out of prison. But ed the group as a way to project influ­
is almost non­existent. their efforts have been stymied because a ence. But these countries now have other
The same goes for naturalisation new rift has emerged between members priorities. Both are seeking reconcilia­
schemes. Even before the oil boom, the of the old guard over who should lead the tion with anti­Islamist neighbours, such
Gulf’s coastal towns and pilgrimage routes as Egypt and the United Arab Emirates.
were melting pots. Today their citizenry Qatar has asked Brotherhood activists to
includes sizeable populations of ajam, leave. Turkey has put pressure on Islam­
whose ancestors hail from Persia, and ist satellite­tv stations to dial down their
Afro­Arabs, descendants of East Africans invective. “The global movement is no
brought to the region as slaves. Diversity more,” says Mr Tamimi.
was, and is, one of the region’s strengths. The Brotherhood has bounced back
To varying degrees, though, locals live from waves of repression in the past. But
apart from foreigners in their midst. Their it is not clear how it will heal itself, as
dress is distinct and they work mostly in normally it falls to its leaders to settle
the public sector. No one is sure how new internal disputes. Members are split over
citizens will fit into this milieu. whom to follow. Moreover, many of them
Though they have broken a taboo, Gulf are disillusioned. Some say their leaders
rulers have not changed a social compact have not tried hard enough to reach an
that treats citizenship as a gift bestowed on amnesty deal with Mr Sisi. Younger
worthy subjects. They have just expanded members complain about the lack of
the pool of worthy subjects in order to at­ fresh faces at the top. Mr Mounir has at
tract and retain talented foreigners—part least appointed a young spokesman
of a broader scramble to diversify oily called Sohaib Abdel­Maqsoud. “We need
economies. For most foreigners, and for our own Arab spring if we want a renais­
many locals, the path to citizenship will re­ Caged in Cairo sance,” says Mr Maqsoud.
main blocked. n

012
 The Economist December 11th 2021 Middle East & Africa 45

and piggy­bank to Mr Kabila’s friends. Its

former chairman, Albert Yuma Mulimbi,
has been accused of diverting more than
$8bn in revenue from copper and cobalt
mining. Even so, the president can hardly
claim to have stamped out graft. Since he
came to office Congo has slipped by nine
places to 170th out of 180 in a ranking com­
piled by Transparency International, an
anti­corruption watchdog.
The president has also made little pro­
gress in honouring his pledge to restore se­
curity and defeat the armed groups that
have terrorised eastern Congo for 25 years.
More than 5.5m people who have been
forced from their homes are still unable to
return. Many live in miserable camps that
are sometimes attacked by rebels. In No­
vember a militia stormed one in Ituri prov­
ince, killing 44 people. Soon after that an
Congo armed group kidnapped two aid workers
near Goma. In a bid to restore order Mr
All the president’s promises Tshisekedi imposed martial law on two of
the bloodiest eastern provinces in May,
though to little effect. In November he al­
lowed troops from neighbouring Uganda
to cross the border to attack one of the
KINSHAS A
more dangerous groups, the Allied Demo­
From free schools to peace in the east, Félix Tshisekedi has failed to deliver cratic Forces (adf), a militia that has links
to Islamic State, after it detonated bombs

L ouis bahati, a teacher at a primary

school in Goma, a city in the east of the
Democratic Republic of Congo, has not
spectorate General of Finance. It revealed
that some $31m earmarked for education
had been embezzled. This prompted the
in Kampala, Uganda’s capital. But this has
not made locals feel any safer. Many fret
that the Ugandan troops will outstay their
been paid for more than two years. Strug­ World Bank to suspend its first payment of welcome and plunder the region’s miner­
gling to feed his family and on strike for a the $800m it had committed in support of als, as they did during Congo’s second civil
second time, he took up a job painting a Mr Tshisekedi’s free­schooling pro­ war, which raged from 1998 to 2003.
neighbour’s house. When a passing pupil gramme. The government has since told To be fair, Congo is not an easy place to
spotted him, he was humiliated. “My class teachers that they will be paid in January, run. “Tshisekedi has the hardest job in Af­
mocked me,” he says. “The student told which encouraged some to go back into rica,” says Piers Zvegintzov, a security ad­
them that he had seen their teacher, co­ their classrooms. But many, including Mr viser based in the capital, Kinshasa. It en­
vered in dirt, doing this painting work.” Bahati, do not believe the government and tails “managing an impossible coalition of
Although Mr Bahati has been a teacher are still on strike. adversaries while desperately trying to
at a state school for six years, he has not yet The fiasco highlights a wider problem: build a real power base, drive through re­
been added to the government payroll. Mr Tshisekedi’s tendency to promise the forms and not get assassinated.” Trying to
This meant that when President Félix Tshi­ moon. As well as his pledge of free primary win a fair contest in the next presidential
sekedi (pictured) announced that primary schooling, he also campaigned on a vow to election in 2023 must now be added to that
education would be free from September bring peace to the east of the country and to list. Some worry that because Mr Tshise­
2019—which was one of his main election stamp out corruption. The electorate kedi has failed to honour any of his cam­
promises—Mr Bahati stopped receiving seems to have placed little faith in these
any pay. Like thousands of other teachers undertakings. In presidential elections in CENTRAL AFRICAN
who were not on the books, he relied on 2018 he came a distant second, with about REPUBLIC SOUTH SUDAN
fees from parents. After the president’s an­ 19% of the vote, according to an indepen­
nouncement, they stopped paying. dent tally by the Catholic church. It said Provinces under
martial law Ituri UGANDA
The snag with the president’s pledge the poll had been won by Martin Fayulu, a
was that his government does not have charismatic anti­corruption campaigner. CONGO- Kampala
BRAZZAVILLE North
enough money to pay teachers’ wages. Mr Tshisekedi nonetheless claimed victory Kivu
Even some of those who were on the pay­ and came to power, seemingly after a back­ CO NGO RWANDA
Goma
roll had their salaries chopped in half, to room deal with the outgoing president, Jo­
BURUNDI
$140 a month in most cities and $90 in vil­ seph Kabila, whereby he is alleged to have
lages. When teachers went on strike for promised to leave the unpopular Mr Kabila Kinshasa
TANZANIA
two weeks in October, schoolchildren in control of much of the state.
stormed parliament chanting, “We want to Since then, however, Mr Tshisekedi has ANGOLA Kasai
provinces
study,” and “If we do not study we will end cunningly managed to distance himself
up on the streets taking drugs.” from his predecessor, form a new coalition
To make matters worse, scores of fake and consolidate his grip on power. He has ZAMBIA
teachers working at non­existent schools even managed to fire some of Mr Kabila’s
have somehow made their way onto the closest allies, including the chairman of 500 km
payroll, according to a report by the In­ Gécamines, the national mining company

012
 46 Middle East & Africa The Economist December 11th 2021

paign pledges, he may simply try to rig the erode trust in the election. “We will inten­ have big jobs at once is partly by chance.
vote. “There are two ways to stay in power,” sify our protests until they depoliticise the But there are signs that governments have
says a ruling­coalition mp who asked not to electoral commission,” says Mr Fayulu. But deliberately sought Africans to lead big in­
be named. “One is to become popular by the protesting has not gone well. When a stitutions. “There was a lot of feeling that it
doing the work you promised—another is sit­in was organised outside the electoral was Africa’s turn—and that it was the turn
to be strategic.” By “strategic” he means commission in November, truckloads of for a woman,” says Keith Rockwell, the
cheating, adding that “Tshisekedi has gone heavily armed police blocked the road wto’s spokesman, of the mood before Ms
for the latter.” leading to it. At another rally there were Okonjo­Iweala’s appointment.
Lawmakers have appointed one of his clashes between protesters and Mr Tshise­ This reflects a realisation that the focus
allies, Denis Kadima, as the head of the kedi’s supporters, some of whom the presi­ of many of these institutions is shifting to
electoral commission. The constitutional dent has allegedly shipped in from his sub­Saharan Africa, which has more than
court, which would have the final say if the home region, the Kasai provinces. two­thirds of the world’s poor and where
vote were contested, is being stacked with As for those living under Mr Tshise­ the average life expectancy is about 61
Mr Tshisekedi’s loyalists. The Catholic and kedi’s rule? “Life is unmanageable, we are years, compared with 80 years in rich
Protestant churches, which are among the even struggling to eat,” says Mr Bahati. “I countries. Although Africa accounts for a
few respected institutions in Congo, have do not see any change with this regime.” It small part of global commerce, it has the
criticised Mr Kadima’s appointment. So is unfortunate, then, that the regime most to gain from trade. It will probably
have opposition parties, which say it will seems set on staying. n make up a growing share of the imf’s work,
too. Lending to sub­Saharan countries is 13
times higher since the pandemic struck.
One thing the new bosses may offer is a
“special ear” for issues on the continent,
says Ms Sayeh. At the very least their lead­
ership is bringing greater attention to Afri­
ca. “I don’t think anyone in the wto set out
to ignore the concerns of Africa,” says Ms
Okonjo­Iweala. Nonetheless, she adds, “Af­
rica has not benefited as much from trade
integration…as it should have.” In theory
many African countries get lower tariffs in
richer countries through trade deals al­
lowed under the wto’s rules. Yet this does
not work well in practice. “We really need
to look at some of those agreements and
make it easier for African countries,” says
Ms Okonjo­Iweala. Mr Diop says the ifc
has not neglected Africa in the past. Still, it
plans to double annual investments on the
continent to $10bn in the next few years.
Personal experience inevitably shapes
Global governance leaders' priorities. Dr Tedros lost his broth­
er, who was about four, to what was proba­
Africans at the top bly measles. He made similar curable dis­
eases the focus of his campaign to run the
who, and has prioritised them during his
term. When Ebola struck the Democratic
Republic of Congo, Dr Tedros visited 14
times, despite the threat from rebels.
DAKAR
Having Africans in charge of wonk­
More international institutions have sub-Saharan bosses
filled institutions can also provide role

T he world’s big multilateral institu­

tions are always keen to trumpet their
global outlook. Art from far­flung corners
Organisation (who) through the pandem­
ic. Ngozi Okonjo­Iweala, a Nigerian, heads
the World Trade Organisation (wto).
models and help overcome racist stereo­
types. “It’s important for people to see an
African leading an institution in the eco­
of the world adorns their headquarters— Makhtar Diop, a Senegalese, presides over nomic sphere,” says Ms Okonjo­Iweala.
and should a visitor ever need to consult a an investment portfolio worth about Dr Tedros was recently nominated un­
massive map of the world, one is rarely far $64bn at the International Finance Corpo­ opposed to lead the who for a second term.
away. Yet in one area their global creden­ ration (ifc), the semi­independent arm of Ms Okonjo­Iweala and Mr Diop doubtless
tials have not always matched up: leader­ the World Bank that invests in private aspire to similar endorsements of their
ship. Most of the bosses of multilateral in­ firms. A stitch­up gives the top jobs at the work. Trailblazers sometimes feel extra
stitutions have been white men. Sub­Saha­ World Bank and imf to America and Eu­ pressure to succeed, and may be held to an
ran Africans, especially, have been over­ rope. But for just the second time a sub­Sa­ unfairly high standard. Yet not all leaders
looked. Until 2017 only one had led a big haran African, Antoinette Sayeh of Liberia, of global institutions excel. The real sign
multilateral organisation: Kofi Annan, is a deputy managing director of the imf. that Africans have broken through the
who ran the un, which rotates its top job by Each is highly qualified. Ms Okonjo­ glass ceiling in international organisa­
region, from 1997 to 2006. Iweala, Mr Diop and Ms Sayeh were all fi­ tions will be when run­of­the­mill leader­
Today Africans lead several global insti­ nance ministers and had all worked at the ship by an African generates no more com­
tutions. Tedros Adhanom Ghebreyesus, an World Bank. Dr Tedros was health minister ment than the tepid tenure of a bigwig
Ethiopian, has steered the World Health and then foreign minister. That they all from Asia, Europe or the Americas. n

012
 Europe The Economist December 11th 2021 47

Germany’s new chancellor larious company. But his circuitous, con­

voluted style of public speaking will hardly
Enter the quiet man satisfy those craving a more direct mode of
communication from their chancellor.
When challenged on his robotic persona
earlier this year, Mr Scholz said he hoped to
become chancellor, not a circus ring­
master. His press conferences are deathly.
BE RLIN
A trained employment lawyer, like ma­
Olaf Scholz’s modest bearing may belie his ambition
ny of today’s ageing social democrats Mr

T en years ago Christoph Holstein re­

ceived a summons to the office of Olaf
Scholz. Mr Scholz had just led the Social
posals, all of which are in the coalition deal
agreed by the spd with two smaller parties:
lifting Germany’s hourly minimum wage
Scholz dabbled in radical leftism before, in
his words, “detoxifying” himself into mod­
erate social democracy in his 20s. He
Democrats (spd) to a stunning election win to €12 ($13.50), maintaining the state pen­ bounced between party, city and federal
in the city­state of Hamburg, and Mr Hol­ sion and building 400,000 housing units a politics for decades, suffering reverses (be­
stein was to be his government spokes­ year. Other colleagues praise Mr Scholz’s ing booted from a senior spd role in 2004,
man. Mr Scholz offered two pieces of guid­ Hanseatic work ethic and his pragmatism. the g20 riots in Hamburg in 2017, losing a
ance: “We are never offended, and we are Another thread is impatience. Mr party leadership bid in 2019) as well as vic­
never hysterical.” Mr Holstein, now on Scholz shares Mrs Merkel’s air of serenity tories (two huge election wins in Ham­
Hamburg’s state council, found the advice and competence. Unlike her, he struggles burg, this year’s triumphant national cam­
so useful that it remains pinned up in his to mask his disdain for those he considers paign). In 2018 he pushed his reluctant par­
office under the words: “Scholz’s first law”. ill­briefed, a trait that can infuriate antago­ ty to support Mrs Merkel’s Christian Demo­
Germans and others who learned to appre­ nists. In Hamburg, his aides would shut crats in yet another “grand coalition”. He
ciate the calm demeanour of Angela Mer­ down dissenters by exclaiming “owd”, became her vice­chancellor and finance
kel during her 16 years in office will find re­ short for Olaf will das! (“Olaf wants that”). minister, a role that served as a finishing
assurance in Mr Scholz, who replaced her Colleagues swear that Mr Scholz can be hi­ school for the office he has now achieved.
as German chancellor on December 8th. A prolific reader, Mr Scholz turned his
Talk to those who have got to know the finance ministry into a brains trust of
→ Also in this section
63­year­old Mr Scholz throughout his ca­ sorts. His emphasis on “respect”, by which
reer, and several leitmotifs emerge. Reli­ 48 Valérie Pécresse gets the nod he means a society with equal regard for
ability is one. “He only ever promises binmen and ceos, is inspired by Michael
49 Biden, Putin, Ukraine and Zoom
things he can achieve,” says Dorothee Mar­ Sandel, an American theorist sceptical of
tin, an spd mp from Hamburg. Campaign­ 49 The shortcomings of polder culture meritocracy. Too little of the stuff, Mr
ing for election this summer, he boiled Scholz argues, breeds populism and illib­
50 Charlemagne: The invisible European
down his offer to a handful of modest pro­ eralism. “He is often portrayed as a social

012
 48 Europe The Economist December 11th 2021

democrat in conservative clothes, but French politics coming across as serious, well­briefed and
that’s wrong,” says a colleague. trenchant. She was also careful to remind
Mr Scholz also imbibed a lesson offered Dame de fer viewers that she can be a vote­winner. Ear­
by previous spd election­winners: that lier this year she was re­elected head of the
Germans are a centrist bunch wary of vi­ Ile­de­France region, crushing the hard
sionaries. Unloved by spd members who right, the Greens and the centre. In the end,
wanted more red meat in their politics, Mr at the primary, party members preferred
PARIS
Scholz nonetheless almost single­handed­ her to both Mr Bertrand and Michel Bar­
Valérie Pécresse could beat
ly led his comrades to an unexpected, if nier, the European Union’s former Brexit
Emmanuel Macron
narrow, election win in September. If this negotiator, both of whom were eliminated
hardly represented a great renaissance of
the European left, it did wonders for a party
that had long been in the doldrums.
C ould the French for the first time elect
une présidente when they go to the polls
next April? Ségolène Royal nearly got there
in a tight vote in the first round.
A long­time party hack, Ms Pécresse is a
familiar figure in France. First elected dep­
The pandemic had a hand in Mr Scholz’s as the Socialists’ candidate, in 2007, but uty 19 years ago, she is a protégée of Jacques
own recovery. He spent his first two years was defeated by Nicolas Sarkozy. Ten years Chirac, a Gaullist former president, and be­
as finance minister dismaying those who later Marine Le Pen, a populist­nationalist, came a minister under Mr Sarkozy. She de­
hoped a Social Democrat might end Ger­ was soundly beaten by the centrist Em­ scribes herself as “two­thirds Merkel, one­
many’s excessive fiscal prudence. But manuel Macron. Now the Gaullist political third Thatcher”: a blend of consensus­
when covid­19 struck Mr Scholz cast aside party is taking its turn. On December 4th seeking politics and reformist steel. As
Germany’s fiscal rules to splash hundreds the Republicans picked Valérie Pécresse, higher­education minister Ms Pécresse
of billions on furlough and corporate­sup­ head of the Ile­de­France region around took on the unions to give universities
port schemes. He helped design the eu’s Paris, as their presidential candidate. more autonomy. As a primary candidate
€750bn ($845bn) recovery fund, and earlier In a run­off primary vote among party she pilloried Mr Macron for not cutting
this year helped push through an interna­ members, Ms Pécresse trounced Eric Ciot­ civil­service jobs and for “burning through
tional corporate­tax deal. ti, a deputy from Nice and an anti­immi­ cash” with his high public spending.
Foreign and European policy will com­ gration hardliner from the party’s right It is a mistake, though, to cast Ms Pé­
mand much of Mr Scholz’s time. His do­ wing, securing 61% of the vote to his 39%. cresse uncritically as a party centrist. The
mestic ambitions will focus on climate. He Days later Elabe, a polling group, recorded product of a Catholic private­school edu­
calls the transition to a carbon­free future a leap for Ms Pécresse from fourth to sec­ cation, she is culturally as well as fiscally
Germany’s biggest industrial test in a cen­ ond place, suggesting she could beat Mr conservative. Ms Pécresse voted in 2013
tury. It will be a political challenge, too. Macron in a run­off. Nomination bumps against the legalisation of gay marriage
The coalition deal commits the new gov­ are common, and other polls recorded a (though she later accepted it), and espous­
ernment to exacting targets, including an smaller one. But the former budget minis­ es a tough immigration policy, including
80% share of renewables in electricity gen­ ter and fellow graduate of the elite École an end to the automatic right to French
eration by 2030, but is vague on how to fi­ Nationale d’Administration suddenly citizenship of those born in France.
nance the required investments. That rid­ looks like a credible challenger. Ms Pécresse may have triumphed in the
dle could trigger rows between Mr Scholz’s Before the primary campaign, Ms Pé­ primary, but she now needs to keep a divid­
governing partners, the tax­cutting Free cresse was seen in some quarters as an out­ ed party together. Eric Zemmour, a reac­
Democrats and the left­leaning Greens. sider. Polls suggested that if selected by the tionary polemicist, has declared that he
Managing clashes inside his coalition Republicans she would do worse in a presi­ too is running. This has dragged the debate
will test Mr Scholz’s celebrated mediation dential vote than Xavier Bertrand, a rival onto toxic ground. As it is, in 2017 Mr Ciotti
skills. So could soothing the inevitable primary candidate and head of the Hauts­ refused to vote for Mr Macron to keep out
frustration of the Greens, some of whom de­France region. Like him, she had quit Ms Le Pen. Now he vows he would prefer
emerged disappointed from the coalition the party, for her part in exasperation at its Mr Zemmour to Mr Macron were that the
negotiations, as well as potential restive­ fecklessness. But Ms Pécresse performed choice in 2022. He has already complained
ness in the spd’s own ranks. To manage well in the four televised primary debates, that since her nomination Ms Pécresse has
disputes Mr Scholz will rely on a handful of not embraced his views properly, before
trusted aides, chief among them Wolfgang the pair hastily arranged a truce for the
Schmidt, an ebullient figure whose reward cameras at a restaurant in Nice.
for decades of service to Mr Scholz will be If she can tread this line deftly, though,
the job of running his chancellery. Ms Pécresse will make a tricky contender
Mr Scholz’s quiet bearing may belie his for Mr Macron, who remains most polls’ fa­
ambitions for Germany. “He thinks that vourite for 2022. On the centre­right, she
under Merkel Germany failed to live up to could win over some Macron supporters
its potential, and now needs a progressive who are alarmed by high levels of public
renewal,” says Dominic Schwickert of Das debt. On the hard right, she could lure
Progressive Zentrum, a think­tank. Yet de­ some former Fillon voters who have been
spite her own reform plans Mrs Merkel will tempted by Mr Zemmour. The polemicist’s
be remembered mainly as Europe’s crisis­ candidacy will split the hard­right vote and
manager­in­chief. Unexpected events will lower the hurdle for getting through to the
prove at least as testing for Mr Scholz. He second round. With the left enfeebled, this
takes office amid a brutal fourth wave of means that a run­off between Mr Macron
covid­19 and the prospect of renewed con­ and a centre­right candidate, which looked
flagration in Ukraine. For now, a surpris­ unlikely a couple of months ago as the Re­
ingly heady air of optimism surrounds his publicans squabbled, is now entirely plau­
new, untested coalition government. Olaf sible. So far only one poll has suggested
will das. But the new chancellor may not al­ that Ms Pécresse could then beat Mr Mac­
ways get what he wants. n Might she be the one? ron. But that is not a bad start. n

012
 The Economist December 11th 2021 Europe 49

Ukraine
Dutch government
Diplomacy with Poldering on
menaces AMSTE RDAM
Dutch governing culture hits a snag
WASHINGTO N, DC
Joe Biden upbraids Vladimir Putin. But
can he stop another Russian invasion?
T he dutch are not used to being
ranked among the worst in Europe.
But that is where they stand in covid
new government. For months the ruling
centre­right Liberal party locked horns
with one of its junior partners, the cen­

W hen joe biden met Vladimir Putin

in Geneva last June, he spoke of his
desire for “stable and predictable” rela­
booster vaccinations: 4.1% of the pop­
ulation have had an extra jab, just behind
Romania at 5%. They started on Novem­
tre­left d66 party, which wanted more
leftist outfits in the coalition. d66 backed
down, but an agreement is only now
tions with Russia and pointed to several ar­ ber 18th, months after other countries. “It nearing completion.
eas in which the two could co­operate, not is impossible to explain,” says Roel Cou­ The Dutch call such lengthy consulta­
least on limiting nuclear weapons and tinho, a former head of the national tions polderen on the theory that they
fighting terrorism. This time, in a two­ outbreak­management team. He blames stem from the country’s history of land
hour video call, the tone was confronta­ the Dutch culture of governing via ex­ and water management. Maintaining
tional. Mr Biden warned his counterpart of haustive negotiations and consensus—a polders in a sea­level landscape requires
harsh retribution if the Russian troops cur­ system known as the “polder model”. agreements to fix dykes and canals, even
rently massing on Ukraine’s borders Indeed, almost nine months after between opposing parties. In Dutch
launched an invasion. elections last March, the country has no government, the polder model means
“He told President Putin...that, if Russia that policy is set in years­long discus­
further invades Ukraine, the United States sions with trade unions, industry associ­
and our European allies would respond ations, housing societies, cyclists—every
with strong economic measures,” said Jake stakeholder imaginable. In Dutch soci­
Sullivan, Mr Biden’s national security ad­ ety, it means a fondness for lengthy
viser. “We would provide additional defen­ meetings where everyone gets a turn.
sive material to the Ukrainians…and we This consensual system is excellent
would fortify our nato allies on the east­ for long­term planning. Dutch infra­
ern flank with additional capabilities in re­ structure and pensions are among the
sponse to such an escalation.” best in the world. But it can be disastrous
America is also offering Russia a dip­ in a crisis such as a pandemic. Decisions
lomatic off­ramp, in the form of a broad over curfews and vaccine passports are
discussion on European security (eg, cold­ interminably delayed by debates be­
war­style accords that limit forces). But tween interest groups and government
this could take place only “in the context of bodies. Meanwhile, the Dutch political
de­escalation”, Mr Sullivan said. It was un­ scene has fragmented, and giving every­
clear whether this will be enough to induce one a say is getting harder. There are 17
Mr Putin to call back his troops. parties in parliament and four in the
American and European officials are likely coalition—if they can bring the
working on co­ordinated sanctions in case This is not a pandemic poldering to an end and strike a deal.
of an invasion. America is pressing the
newly installed German coalition led by
Olaf Scholz to be ready to halt the opening The real problem for Mr Putin may be necessarily have an end state in mind,”
of the Nord Stream 2 pipeline, which will less Ukraine joining nato than nato help­ says Kurt Volker, a special envoy to Ukraine
deliver more gas from Russia to Europe. It ing Ukraine. He is worried about nato’s when Donald Trump was president. “He
is not yet clear whether sanctions would and Western countries’ growing role in wants to create positions of power, create
include cutting Russia off from the swift arming and training Ukraine’s forces, to opportunities and exploit them.”
system of financial transfers, which would the point where they present a more capa­ For all Mr Biden’s sternness, he appears
be hugely damaging. ble opponent—though not strong enough to have set limits to what America will do.
Some assume that Mr Putin’s military to stop a full­scale invasion. Ukraine is one Mr Sullivan said America’s purpose is “to
manoeuvres are designed to get America’s of the largest recipients of American civil­ deter a Russian military invasion of further
attention. A similar build­up in the spring ian and military aid. territory of Ukraine”. That would appear to
yielded the summit in Geneva in June. This More broadly, Mr Putin wants America leave open the prospect of Russia annexing
one got him a video conference. But few to recognise that Ukraine should be within the breakaway regions where it already
can claim to know how far he will go. Mr his sphere of influence. In 2014 Mr Putin pulls the strings. And although America is
Putin says he wants a guarantee that Uk­ took over and annexed Crimea, and backed prepared to send more forces to reassure
raine will never join nato, and that it will Russian­speaking separatists in the east of nato allies, Mr Biden will not commit
not be a base for Western weapons that can the country, creating the breakaway “re­ American forces to Ukraine itself. If an in­
threaten Russia, even though neither pros­ publics” of Donetsk and Luhansk. The vasion is averted, the next question will be
pect seems remotely likely given the fragil­ Minsk agreements, intended to end the what Mr Biden and Mr Putin might agree to
ity of Ukraine’s government, widespread conflict, would have created a weak and in any subsequent talks. In a tweet before
corruption and unresolved conflicts. Yet loose federation in Ukraine, possibly in ef­ the summit, Volodymyr Zelensky,
nato feels it cannot formally close the fect giving Russia a veto over its actions. Ukraine’s president, thanked the Ameri­
door on Ukraine. In Mr Sullivan’s view, But disputes over their precise meaning cans for their “joint & concerted action”.
“Countries should be able to freely choose and the sequence of steps to be taken have But he added an implied warning: “Noth­
who they associate with.” stalled implementation. “Putin does not ing about Ukraine without Ukraine.” n

012
 50 Europe The Economist December 11th 2021

Charlemagne The invisible European

Angela Merkel’s legacy in Europe is already fading away

man engine, Mrs Merkel would hit the clutch; the car would make
a lot of noise, but not go anywhere. In a club of 27, staying still is
usually the easiest compromise. It means no one is run over. But it
was a particularly enticing option for Germany. After all, from a
German perspective, the eu works rather well. It provides Germa­
ny with a currency that keeps exports cheap and a large market in
which to sell them. Why change the status quo if it works?
When Mrs Merkel lifted her foot from the clutch, things did
happen. A €750bn ($845bn) fund to help eu countries recover
from covid­19, paid for with common debt, was agreed on her
watch. The former chancellor painted it as a pragmatic step in the
extreme circumstances of the pandemic. Mr Scholz was comfort­
able labelling it as something more ambitious, calling potential
eu­level taxes to pay for it a “Hamiltonian moment” in the vein of
the American Founding Father. Making the fund a permanent fix­
ture induces nausea both in the cdu/csu and in parts of the co­
alition. Until recently, Germany could rely on a host of allies who
agreed. Now those who would be keen on a repeat, or even making
it permanent, are ascendant. If a tool has been used once, it can be
used again.
Continental political tides are moving against Mrs Merkel’s
worldview. Nuclear power, which Mrs Merkel scrapped in Germa­

E xceptions prove who rules. In the summer of 2015 Angela

Merkel suspended the eu’s asylum rules and allowed 1m people
into Germany, in the most controversial decision of her tenure.
ny, is enjoying a renaissance. Eastern Europe and France are fall­
ing back in love with reliable, low­carbon electricity from nuclear
plants. (Germany is fighting a rearguard action to stop the com­
Rather than being returned to their first port of entry in southern mission acknowledging that nuclear power is green.) Mrs Merkel
Europe, Syrians arriving in Germany were given a new life in Eu­ once sat atop a cabal of centre­right leaders who set the direction
rope’s most prosperous country. Skip forward to December 2021 of the club. At the start of the previous decade, the leader of practi­
and asylum rules are being suspended again. This time the aim is cally every big eu country hailed from the centre­right. Now not
to keep people out. Those crossing from Belarus into the eu now one does. Kyriakos Mitsotakis, the prime minister of Greece (pop­
face up to four months in a detention centre while their applica­ ulation: 11m), is the most prominent centre­right leader.
tion is processed. Others will not make it even that far. Polish bor­ A looser line on fiscal rules is emerging across the eu. Under
der guards are pushing them back into Belarus, sometimes rough­ Mrs Merkel, the German view on spending (bad) and saving (good)
ly. Willkommenskultur has been shown the door. was foisted on a continent. As finance minister, the centre­left Mr
When it comes to asylum policy in the eu, it is as if Mrs Mer­ Scholz took pains to play up the similarities between himself and
kel’s “Wir schaffen das” (“We can manage this”) had never been Wolfgang Schäuble, his hardline cdu predecessor. Usually, pass­
spoken. Fences are springing up. Proposals to share the burden of ports matter more than politics when it comes to eu finance min­
asylum­seekers more evenly have been stuck for five years. It is far isters. This time Christian Lindner, the new liberal finance minis­
from an isolated case: the most significant policies Mrs Merkel ter, has done his best to avoid being painted as a hardliner. Under
pursued at a European level are being undone. The German chan­ Chancellor Scholz, fiscal policy seems to be shuffling from one
cellor left the European stage only on December 8th, when Olaf amenable to Germany to one more forgiving of southern Europe.
Scholz’s coalition of Social Democrats, liberals and Greens offi­
cially took power. Yet the mark left by this century’s foremost eu Gone, but…also forgotten
politician is already fading. Mrs Merkel was the strongest leader on the European stage be­
Part of this is natural. Even in Germany, a land where consen­ cause others were weak. Whereas Helmut Kohl had François Mit­
sus is king, a change of government leads to a change of policy. terrand and Charles de Gaulle had Konrad Adenauer, Mrs Merkel
Take its position on central Europe. As chancellor, Mrs Merkel generally stood alone. Moments when political clout combined
coddled Poland and Hungary as they trampled democratic norms. with competence, such as the rise of Mr Macron in France and Ma­
Mrs Merkel’s Christian Democratic Union (and the Christian So­ rio Draghi’s elevation to prime minister in Italy, are brief. Both
cial Union, its Bavarian sibling) hindered measures to curb Hun­ could be gone next year. If Germany appears to dominate eu poli­
gary and Poland’s governments, such as cutting eu funds or even tics, it is as much down to the disorganisation of other govern­
just isolating them politically. In Mrs Merkel’s mind, the risk of di­ ments as Teutonic strength.
vision trumped fears about democracy. In a sense, Mrs Merkel’s erasure is cruel. Alongside Mr Draghi,
Under the new coalition, a stricter line will emerge. The co­ she has the best claim of any leader to have kept the eu going. A
alition agreement contained tough provisions on respecting the less patient one might easily have ended up pushing Greece out of
rule of law. No German government can be seen to throw its the eurozone; a more dogmatic one could have overseen the cur­
weight around on Polish affairs, for fairly obvious reasons. Yet it rency’s collapse. She helped the club survive some difficult times,
can stop standing in the way of others, as Mrs Merkel did. yet she did not shape it. The memory of Mrs Merkel’s career will
It was a similar story when it came to reforming the eu. When­ vanish like footprints in the snow. She kept the club together, yet
ever Emmanuel Macron pushed the accelerator of the Franco­Ger­ barely left a mark. n

012
 Britain The Economist December 11th 2021 51

→ Also in this section

52 Another legal loss for Uber
53 Bagehot: Britain’s suburban future
— Read more at: Economist.com/Britain

Politics on the campaign trail in 2019 has stalled.

The idea that Johnsonism could be a new
The revolution stalls model of government, like Thatcherism
and Blairism, now looks far­fetched.
The working Tory majority of 87 seats in
2019 was an electoral revolution. It was fol­
lowed by constitutional revolution, as Brit­
ain left the eu. For a “people’s government”
of self­styled radicals who quote Gramsci
Boris Johnson’s scandal­afflicted government has lost its radical zeal
and Lenin, that was only the beginning. A

T he second anniversary of Boris John­

son’s election landslide, on December
12th, is an unhappy one. On December 7th,
last year to Barnard Castle, a beauty spot,
by Dominic Cummings, then Mr Johnson’s
chief aide. Labour, the main opposition
revolution in steel and concrete would
“level up” Britain’s economic geography. A
cultural revolution would vanquish elites
a junior diplomat­turned­whistleblower party, has failed to open up the clear poll on behalf of blue­collar voters. A march
laid bare the chaos that surrounded the lead required by Britain’s unequal electoral through the institutions would bring the
British evacuation of Kabul in evidence to geography for it to form a majority govern­ civil service, courts and quangos to heel.
mps. The prime minister denied the claim ment (see chart). What leaves Mr Johnson’s Mr Johnson’s ideological victory is to­
that he personally ordered the airlift of pet supporters despairing is less crisis than tal: only a brave few now advocate rejoin­
dogs as eligible Afghans were left behind. stasis. On many fronts, the revolution he ing the eu or champion cities over towns.
The same day a video emerged of Downing promised during Brexit negotiations and But Brexit has become a frozen conflict.
Street aides and press officers joking about David Frost, the chief eu negotiator, is
a Christmas party held in breach of lock­ seeking to renegotiate the divorce treaty,
down a year ago; the next day a senior press Mid-term hangover and the promised new relationship with
officer, Allegra Stratton, who was seen Britain, voting intention, % Europe is nowhere in sight. eu trade deals
laughingly suggesting that the event had 60 have been replicated but no big new deals
been work­related, resigned. The prime signed. Nor, to Lord Frost’s frustration, has
minister, implausibly, declared he was Conservative 50 regulation diverged from eu models.
shocked and announced an investigation. 40
Mr Cummings had started work on new
And all the while, concerns grow about the subsidy and procurement rules and a loos­
Omicron variant of covid­19. Rules on 30 er immigration regime for scientists, but
Labour
mask­wearing and working from home since his exit in late 2020 policy innova­
20
have been strengthened, though Christ­ tion has ground to a halt. An experimental
mas parties can still go ahead—for now. Liberal Democrat 10 replacement for eu payments to farmers is
Such evidence of arrogance, incompe­ still embryonic, even as existing subsidies
0
tence and poor judgment would reflect are withdrawn. Three hefty reforms being
badly on any government. But this one has 2019 20 21 pursued by Mr Johnson’s government—an
Sources: BMG; Deltapoll; Ipsos MORI; Kantar; NCP; Opinium;
shrugged off bad press before—including Redfield and Wilton; Savanta ComRes; Survation; YouGov
online­safety bill, tougher screening of
over lockdown breaches, such as a jaunt foreign investment and tighter competi­

012
 52 Britain The Economist December 11th 2021

tion rules—are legacies of his predecessor, eo of staff sniggering about a cheese­and­ The change probably means Uber is lia­
Theresa May. Rishi Sunak, the chancellor, wine party suggests. Ministers want Mr ble for anything that goes wrong, such as
has shied away from structural tax reform. Johnson to draft in an old hand to lead its no­shows, and that it is eligible for value­
As for levelling up, what started as an inexperienced staff. Mr Cummings wanted added tax on fares. This may be collected
aspiration to close the productivity gap be­ it to be a panopticon, monitoring White­ retroactively. Some estimates put the po­
tween north and south has become a slo­ hall performance from a nasa­style con­ tential bill as high as £2bn ($2.6bn). Rides
gan for almost any state activity outside trol room. Instead it is kept in the dark by look likely to become 20% dearer.
London. A policy paper has been delayed. ministers and preoccupied with internal Uber’s position in London was already
Ministers disagree on devolution. Having politics. Like any good revolutionary, Mr shaky. In its early days it subsidised fares
promised an infrastructure boom, last Johnson believed that intractable pro­ with venture­capital cash in order to dom­
month Mr Johnson cut back ambitious blems, such as regional inequality and ir­ inate the new market. The same tactic bore
plans for new railways in the north. regular migration, could be solved by sheer fruit in America, where Uber and Lyft form
The government has bashed and bat­ willpower. Caution was scorned as gloom­ a duopoly, but in London Uber is just one of
tered institutions, but not remade or re­ sterism. “Government is boring,” says a many ride­hailing services, including Free
formed them. Mr Cummings hankered to colleague, “and for him it is excruciating.” Now, Bolt and Ola, and must also compete
break up the civil service, and his tenure Far from matching Margaret Thatcher against black cabs and an extensive public­
saw some senior figures squeezed out. Yet in transformation and vision, Mr Johnson transport network. It does not always mea­
they were replaced by Whitehall lifers, and is proving less dynamic than David Camer­ sure up. Drivers complain that Bolt, an Es­
what remains of the reform programme is on, his rival at Eton and Oxford. Mr Camer­ tonian Uber clone, pays better; customers,
consensual and conventional. Ministers on’s career ended in ignominy after he that the licensed black cabs that Free Now
have dreamed since the 1960s of relocating called, and lost, a referendum on Europe, hails often arrive faster.
civil servants outside London, bringing in but he made significant reforms to educa­ This created a negative feedback loop.
more tech skills and improving training, tion, devolution and the civil service. It is Fewer available rides meant passengers
notes Alex Thomas of the Institute for Gov­ neither scandals over cheese­and­wine were less likely to use Uber, which made it
ernment, a think­tank. A war on Scottish parties, nor even the risk of electoral de­ even less attractive to drivers. Then came
separatism, led by a combative “Union Un­ feat, that keeps Tory radicals awake at the pandemic, which both reduced de­
it” in Downing Street, has been wound night. It is the sight of a landslide victory mand for rides and provided new ways to
down, to the relief of Scots Tories who being wasted. n make money behind the wheel, delivering
thought it counterproductive. Nadine Dor­ meals and packages to locked­down
ries, the culture secretary, lobs insults at homes. As Britain reopened, the result was
bbc bosses but has no serious plan for pub­ Ride-hailing in London a shortage of drivers. In November Uber
lic­service broadcasting. raised fares by 10% to try to lure them back.
Who betrayed the revolution? Covid­19 Cost drivers The firm is likely to keep muddling
derailed Mr Johnson’s premiership, occu­ through in London; stepping away from
pying tens of thousands of civil servants, one of its largest markets would send an
burning political capital with mps and extremely negative signal to investors. But
sending borrowing to £320bn in 2020­21 for London’s 2m Uber riders, the future will
($424bn, 15.2% of gdp). Little surprise, be pricier and slower. The days of cheap
A court bashes Uber into
then, that the Treasury has emerged as a rides and two­minute pickup times are
compliance—again
major constraint on Mr Johnson’s aspira­ gone, along with the venture capital that
tions. It has plumped up departmental
budgets, but balked at signing cheques for
levelling up. Adult social care, a supposed
U ber has tried repeatedly to persuade
others to see it the way it sees itself. Its
drivers, the ride­hailing giant has said, are
paid for them. For London’s 45,000 Uber
drivers, the future is harder to predict. The
courts have ruled in their favour, but Uber’s
beneficiary of politically costly tax rises, independent contractors with no right to profitability depends on slashing costs—of
will remain underfunded as the extra cash minimum wage, holiday pay or pensions. which they are the biggest. n
goes on the pandemic health­care backlog. The drivers, for their part, point out that
Bringing net carbon emissions down to ze­ they are managed algorithmically and can­
ro is Mr Johnson’s most ambitious target, not set prices or routes. Courts have taken
but the Treasury is reluctant to use the tax their side. In 2016 the Employment Tribu­
system to encourage behavioural change. nal ruled that Uber drivers were entitled to
minimum wage and holiday pay. Uber lost
Sounds like a whisper three appeals, most recently in the Su­
For true radicals, Conservative voters can preme Court in February. On December 6th
look like the enemy within. The next elec­ it was dealt another legal blow when the
tion will be a defensive operation to hold High Court, in effect, ruled that its entire
seats won in 2019, which means jettison­ business model broke the rules.
ing policies that would disrupt the lives of Uber brought this latest judgment on it­
older voters in provincial towns. A liberal­ self. During the Supreme Court hearing the
isation of planning rules has been parked; presiding judge had suggested that the
loosening food standards, which would al­ firm might be contravening regulations
low a more ambitious trade policy, is off­ governing private­hire vehicles in London.
limits. In their place are simplistic re­ Uber asked the High Court to declare that
sponses to complex problems, such as this was not the case. Instead it agreed and
promises of tougher sentencing for child­ said that the rules required Uber, not driv­
abusers, and headline­friendly policies ers, to enter into contractual agreements
such as stricter pet­welfare laws. with passengers. Transport for London, the
But the main culprits are in Downing capital’s transport regulator, instructed all
Street, which is as callow as the leaked vid­ ride­hailing operators to step into line. A driver’s needed too

012
 The Economist December 11th 2021 Britain 53

Bagehot On the frontier

In a fast-growing suburb life is sweet, and rather strange

that couples moving out from London tend to arrive with one but
quickly succumb and acquire a second. But the new suburbs seem
more embarrassed by their car dependency than older ones did.
The local authority insists that vehicles are tucked beside homes
or in courtyards behind them, rather than lining the streets. Roads
curve and twist in an attempt to slow drivers down.
The new suburban developments are dense. A large one known
as Kingsbrook constructed by Barratt Homes, Britain’s biggest
homebuilder, fits 33 properties into a hectare (13 per acre). With so
much land given over to car parking and garages, little is left for
gardens. In “Metroland”, Julian Barnes’s novel of suburbia, pub­
lished in 1980, the protagonist lies in bed listening to the sound of
lawnmowers. The new suburbanites often find that their small,
shady yards cannot support lawns. “We turfed the garden three
times and it died every time,” says Anna, who lives in a develop­
ment called Buckingham Park. Like others around her, she gave up
and laid Astroturf.
The frontiersmen and women of Aylesbury Vale settled there in
the social­media era, and they often gather online, on thriving
community Facebook pages. “That’s the way you connect immedi­
ately. That’s where you ask what the school is like and how to find a
plumber,” says James Talbot, a vicar. Though mostly middle­class,

T he soundtrack to life on the outskirts of Aylesbury, a town in

south­east England, consists of drilling and the beeping of re­
versing lorries. Fences, scaffolding and piles of earth dot the land­
they are a striking mix of white, south Asian and black African.
Muslims gather for Ramadan, Hindus for Diwali and cultural
Christians for carol­singing. But when these events are over every­
scape. Workers in hi­vis vests are turning farmers’ fields into sub­ one returns to streets and schools that are thoroughly integrated.
urban developments of a few hundred or a few thousand homes. The developments have no history of racial segregation and no
New roads appear frequently, perplexing any satnav that has not purpose­built churches, mosques or ethnic food shops that might
been scrupulously kept up to date. encourage ethnic or religious groups to form clusters.
Britain is often said to be building too few houses, but that is In any case, most residents belong to the same cult of child­
not the whole story. Imagine a balloon that is being gripped by a worship. Two kinds of people move to the outskirts of Aylesbury:
pair of hands. The balloon is steadily inflating as the population those with children and those who are about to have them. The de­
grows and the national government nags local authorities to build velopments are child­oriented even by suburban standards. They
new homes. Meanwhile the hands, representing planning restric­ are arranged around schools and playgrounds, with just a few
tions and local nimbys, try to constrain any expansion. In many shops and other businesses added, almost as an afterthought.
places the hands prevail, and little or nothing gets built. But in More than anything, they resemble national nurseries.
parts the balloon bulges spectacularly, resulting in many more British cities grew in the 19th and 20th centuries by accretion,
homes than local people need. as new suburbs were built next to older ones. By contrast, the lat­
Aylesbury Vale in Buckinghamshire is one of the bulges. Be­ est developments are islands. Fast roads and high acoustic fences
tween 2011 and 2020 its population swelled by 18% to 207,000, separate them from the rest of Aylesbury. Established residents
making it one of Britain’s fastest­growing places. Aylesbury is nei­ tend to prefer that large new developments remain at a respectful
ther beautiful nor a roaring economic success. But it lies just be­ distance, says Adam Tillion of Barratt Homes. As a result, Ayles­
yond the green belt around London, in which development is re­ bury Vale as a whole is a mess. Though the estates are well­
stricted, so it gets some of the suburban homes that might other­ planned individually, they do not add up to a coherent town.
wise be bolted onto the capital. It is England’s frontier, or its Tex­
as—a place where the country is being created at high speed. Out of sight, out of mind
It bears little resemblance to the suburbs that Britain built in Nobody loves the new suburbs—apart, that is, from the people
the 20th century. Developments used to be consistent in form and who live in them. Rob Butler, Aylesbury’s Conservative mp, says
colour—red­brick rashes, as the poet John Betjeman dismissively that voters complain about growing pressure on roads and doc­
described them. The ones going up around Aylesbury are erratic by tors’ surgeries. His constituency is next to Chesham and Amer­
design. A short stretch of road might contain three­, four­ and sham, which the Conservatives lost in June to a Liberal Democrat
five­bedroom houses plus a few flats. Some homes are faced with candidate running a nimby campaign. Boris Johnson’s govern­
brick, while others have been painted green or finished with ment attends to ailing post­industrial towns in the north and Mid­
cream­coloured render. Roofs have different­coloured tiles and lands while ignoring fast­growing suburbs in the south­east.
are pitched at various angles. Nothing lines up perfectly. Local It seems an unfortunate oversight. Aylesbury Vale is sprawling
planners favour this sort of ersatz villagery, and so do developers, and disconnected—a clump rather than a city. But in its ambiva­
who like a mix of properties to sell. lence about cars, its digital enthusiasm, its ethnic complexity and
Despite a railway line, an abundance of pavements and some its almost complete lack of high­street shops or formal religious
appealing paths around the edges of the suburbs, cars dominate. institutions, it points forward. Like it or not, it is a guide to the
Every household seems to have at least two. Local sales agents say country Britain is becoming. n

012
 54
International The Economist December 11th 2021

Transport leaders want to reduce car ownership, so as

to cut congestion and pollution.
Car wars National leaders however tend to want
to add to it, to help the car industry. The re­
sult is clashing policies, where people are
encouraged to buy ever more cars, but find
that they are increasingly unable to use
them as they would like. Car ownership is
MAD ISO N AND PARIS
becoming political.
National leaders want people to buy more cars. Local ones want them to drive less
In New York Eric Adams, the incoming

T he alliant energy centre, a stadium

complex in Madison, the capital of
Wisconsin, hosts all sorts of events, from
as the m4 Sherman tank used in the second
world war. President Joe Biden proudly
calls himself a “car guy”, and on November
mayor, though famous for flouting parking
rules, has promised to implement conges­
tion­charging in Manhattan at last. In Bos­
exhibitions to concerts. In November it 17th was photographed driving an electric ton Michelle Wu, another newly elected
played host to “Mega Monster Trucks Live”, Hummer, the civilian version of the Hum­ mayor, promises to make several impor­
a three­day affair apparently dedicated to vee, outside a factory in Michigan. The tant bus routes free for the next two years.
choking its attendees, mostly families “Build Back Better” bill being debated in In Cleveland, Ohio, Justin Bibb, the mayor­
with small children, with exhaust fumes. Congress includes hefty tax credits for the elect, promises to put “people over cars”,
The stadium was filled with mud and two purchase of electric cars. Pete Buttigieg, Mr and to encourage more people to bike and
large ramps, over which five enormous Biden’s transportation secretary, sings the walk, largely by turning traffic lanes into
cars did jumps. “I know we have some big­ praises of electric pickup trucks, including protected bike lanes. Cities as diverse as
time monster­truck fans!” called the a version of the f­150, as a hardy alternative Buffalo, New York, and Minneapolis, Min­
breathless announcer. At one point an age­ to petrol for rural Americans. nesota, have begun to ditch “parking mini­
ing bmw was lifted into the arena for the mum” rules, which required developers to
trucks to crush. A motorcyclist roared in Two legs better provide ample free parking at new build­
with a bikini­clad model riding pillion, And yet American politicians are not all as ings. Even in California, a state where driv­
carrying an American flag. Children in ear obsessed with cars as they were. Madison, ing is practically a way of life, state­assem­
mufflers screamed in delight as the vehi­ the liberal college city hosting the mon­ bly members have proposed bills to ban
cles, with names like “Kamikaze” and “Jail­ ster­trucks rally, boasts about how many of cities from imposing parking minimums
bird”, each a good five metres (16 feet) tall, its people walk, take public transport or cy­ near public transport. la Metro, Los Ange­
pulled doughnuts and kicked up mud. cle to work. A series of city leaders elected les’s transport authority, is studying con­
At shows like this, America’s car culture across America have promised to nudge gestion pricing.
looks as strong as ever. What is more people out of their cars. For many owning a European cities have been doing this in
American than owning a giant pickup car is no longer the great aspiration it was. some cases for decades. London estab­
truck? The vast car park outside the Alliant In that, America is gently following a pat­ lished its congestion charge in 2003. The
centre was filled with vehicles such as the tern established in Europe for decades, and leading city now is arguably Paris, the cap­
Ford f­150, a pickup almost the same size now accelerating. On both continents city ital of France. Under Anne Hidalgo, the so­

012
 The Economist December 11th 2021 International 55

cialist mayor, and her predecessor, Ber­ who live in the suburbs, feel assaulted by cret UN “Agenda 21” has called for a ban on
trand Delanoë, cars were banned from the urban policies intended to keep them out. private cars. In Britain Piers Corbyn, a con­
left and then the right banks of the Seine in In France, although the changes made in spiracy theorist who believes covid­19, vac­
2013 and 2017. On the right bank, an ex­ Paris are generally popular, a congestion cines and global warming are all hoaxes,
pressway named for Georges Pompidou, charge is almost impossible, says Mr Naj­ has promoted a campaign for drivers to
who proudly opened it in 1967 when he was dovski. The national government, which break London’s new rules on driving. But
prime minister, has been converted into a would have to approve it, is still shaken by much is motivated by actual city policies.
sort of urban park. Ms Hidalgo, who the gilet jaune (yellow vest) protests that In Germany Bild, a feisty tabloid, lambasts
achieved this despite lawsuits led by the began in 2018 against a proposal by Presi­ a culture that is “against the car and people
right, called it a “reconquest” of the city for dent Emmanuel Macron to raise the cost of who rely on four wheels”. In Britain the
its residents. Bars now line the open sec­ petrol. In New York City congestion­charg­ Daily Mail has run a long campaign against
tions of the road, while families on bicy­ ing proposals have also been stalled by the ltns and cycle lanes, arguing that they
cles zoom through the eerily quiet (and state assembly and then the federal gov­ cause traffic jams and increase pollution.
now unpolluted) tunnels. Ms Hidalgo has ernment, even though the state governor
been a vocal proponent of “15­minute cit­ and the city’s mayors were in favour. In Driving on the right
ies”, the idea that almost everything a per­ London, the expansion of ltns, and a That may reflect the politics of car owner­
son needs for daily life ought to be within a charge levied on polluting older cars, have ship. In Britain analysis of exit polls from
15­minute walk or cycle. led to protests and vandalism. the 2019 election showed that car owners
With public transport closed or dis­ In general, for national politicians, sup­ were more likely than non­owners to vote
couraged during France’s lockdown, “we porting car ownership is good politics. Car Conservative by a margin of 17 percentage
did not want people to turn back to their owners tend to be older, and older people points, while Labour had a similar lead
cars,” says Christophe Najdovski, Ms Hi­ vote more. In America the poorest fifth of among non­owners. In America a study by
dalgo’s deputy in charge of transport. So the population spend 29% of their post­tax Stanford University, using data gathered
the city quickly opened more bike lanes. In income on transport, almost all of it on from Google Street View images, found
just a few days in May 2020 they converted buying and running their cars, and even that if saloon cars outnumber pickup
50km of road to exclusive cycle lanes. the richest fifth still spend around 10%. In trucks in driveways, there is an 88% proba­
Nicknamed “coronapistes” by locals, they countries with first­past­the­post voting bility a city will vote Democrat at a presi­
can be less pretty than the rest of Paris; systems, such as Britain and America, they dential election; if the reverse is true, there
crude concrete blocks, soon defaced with are also more likely to live in swing neigh­ is an 82% chance it will go Republican.
graffiti, separate cyclists from motorised bourhoods, such as suburbs, whereas peo­ Polling for Strategic Vision, a consultancy,
traffic. But they worked. When France’s ple who drive less live in the centre of cit­ in 2017 showed that Republicans are
first lockdown ended last summer, there ies, which are usually politically safer. roughly eight times as likely as Democrats
were 60% more cyclists on Paris’s roads The cost of running a car has in many to drive heavy­duty pickup trucks.
than the previous year, and the number has countries actually been falling (see chart). Car usage continues to rise, but mostly
kept on rising. “In just a few months we did Britain’s Conservative government has put because baby­boomers who grew up with
what we would have needed four or five off planned increases in petrol taxes every cars have taken the place of an older gener­
years to do,” says Mr Najdovski. single year for over a decade. The federal ation that had never learned to drive in the
government’s gas tax in America was last first place. Young people are driving less.
Car-exclusion zones raised in 1993. On November 23rd Joe Biden In America in 1983, 92% of 20­ to 24­year­
It is not only Paris. Britain’s government declared he would release oil from the stra­ olds had a driving licence. By 2017, that had
gave local councils the power to close tegic reserve, so as to lower petrol prices, fallen to 79%. The median age of a new car
roads to create “low­traffic neighbour­ which have climbed by 55% since last year. buyer is now 53. In Germany between 1998
hoods” (ltns) without the usual consulta­ Electric cars are likely to prove even cheap­ and 2013 car­ownership rates fell for all ag­
tions with residents that block them. er to run (see Business section). es under 40, but rose sharply among those
Planter bollards have proliferated across And yet a growing number of drivers aged over 65. Young people are more likely
England’s cities, blocking off residential believe that there is what Rob Ford, the to live in cities, and to prefer public trans­
streets to all but bicycles (typically, resi­ crack­cocaine­smoking former mayor of port (possibly because they can still use
dents can enter and exit with their cars, but Toronto, called in 2010 “a war on cars”. their phones).
cannot drive through). When lockdowns Some of this is deluded. In America some Eventually, this may mean fewer cars
started, Amsterdam temporarily banned on the right have spread the idea that a se­ on the roads. For now, however, despite
cars from Spuistraat, Haarlemmerdijk, and automotive bosses’ fears of “peak car”, car
Haarlemmerstraat, three central boule­ ownership continues to rise. And as it
vards. The change now seems likely to be Going downhill does, the rules of the road are sure to be­
made permanent. As Glasgow, Scotland’s Household spending on transport, % of total come more controversial. Over the next
biggest city, played host to cop26 last 20 two decades, the amount of time wasted in
month, city leaders announced plans to traffic in Britain is likely to increase by
ban all cars from the centre over the next United States 50%, according to a study by the Tony Blair
18
five years, in the hope of reducing carbon­ Institute, a think­tank, in August. But it
dioxide emissions. In New York City, as in 16 spotted “a huge opportunity to rethink our
many places, street parking was converted Britain relationship with our cars and the incen­
into outdoor dining space, so that restau­ 14 tives we put around their use”. This would
rants could stay open. Chicago has un­ France be the introduction of road­pricing, ie,
12
veiled plans for a further 160km of segre­ charging tolls to use almost all urban
gated cycle lanes. 10 roads. Mayors struggling with air pollution
Such policies work. From 2001 to 2019 and constant traffic jams will almost cer­
car ownership in Paris dropped from 60% 2000 05 10 15 20
tainly agree. National leaders, who need to
of households to 35%. But they are not al­ Sources: Eurostat; ONS; US Department of Transportation
court the older, petrolhead, vote will prob­
ways popular. Drivers, especially those ably think the opposite. n

012
 56
Business The Economist December 11th 2021

Charging electric vehicles are to be met, by 2050 the world will need
five times as many.
Current situation Governments’ current pledges to phase
out ice cars and shift to evs are, it is true,
not quite consistent with net­zero. Even if
roads turn electric less speedily than they
should, though, the sums the world needs
to spend on charging infrastructure are
still stupendous. In a slower scenario en­
Forget Tesla’s production hell. The hardest bit of evs is the powering up
visaged by Bloombergnef (bnef), a re­

C ar-buyers are getting behind the

wheel of an electric vehicle (ev) in ever
greater numbers. As battery costs tumble,
filled automobiles that most obviously
embody the ev revolution, however, and
a merciless bottleneck appears. Not even
search firm, in which ev sales keep rising
as battery prices fall but reach just under a
third of all vehicles sold by 2030, roughly
prices are falling. Compared with internal those eyeing a new ev are sufficiently $600bn of investment would still be need­
combustion engine (ice) cars, which can aware of it. Governments are only waking ed by 2040. That would pay for fewer char­
be a pain to drive and service, electric cars up to the problem. Put simply: how will all gers than the iea foresees—24m public
are a thrillseeking motorist’s dream. But the electric cars get charged? points alone by 2040 (and 309m in total). If
the shift to evs is about more than driving The current number of public char­ net­zero is to be achieved by 2050, bnef
pleasure. Transport accounts for around a gers—1.3m—cannot begin to satisfy the de­ puts the cumulative charging investment
quarter of the world’s carbon emissions, mands of the world’s rapidly expanding required at a whopping $1.6trn.
and road vehicles for around three­quar­ electric fleet. According to an estimate by Besides installing too few public char­
ters of that share. If the world is to have any the International Energy Agency (iea), a gers, the charging industry’s operational
chance of reaching net­zero by 2050, evs forecaster, by the end of this decade 40m record is poor. The official number cur­
will need to take over, and soon. public charging points will be needed, re­ rently exceeds what some authorities reck­
The 6m pioneers who opt for evs this quiring an annual investment of $90bn a on is needed. The European Commission,
year will still represent only 8% of all car year as 2030 approaches. If net­zero goals for example, thinks every ten evs require
purchasers. That figure must rise to two­ one public charger. According to the Bos­
thirds by 2030 and to 100% by 2050. Many ton Consulting Group (bcg), there are now
investors are operating on the assumption → Also in this section five evs per charging point in the eu and
that this will all happen as smoothly as a China, and nine in America.
58 Bartleby: Lessons from Theranos
Tesla accelerates. The soaring market val­ That is in theory. In practice, a survey of
ues of Elon Musk’s $1trn company, new­ 59 Chinese listings chargers in China by Volkswagen (vw)
comers such as Rivian, which makes elec­ found many inoperable or “iced” chargers
59 Traumas of digital therapy
tric pickup trucks, and Chinese luxury ev (those blocked inadvertently or deliberate­
firms, attest to sky­high confidence. Elec­ 60 German food-delivery wars ly by fossil­fuelled cars). Only 30­40% of
tric­battery makers, too, are booming. China’s 1m public points were available at
62 Schumpeter: Big business v big labour
Look beyond the glamorous, high­tech­ any time. It is safe to assume some inoper­

012
 The Economist December 11th 2021 Business 57

ability in the eu and America. This sum­ make money charging the world’s expand­
mer Herbert Diess, vw’s boss, complained Highly charged 2 ing fleet means that “hyperbolic growth” is
on LinkedIn, a social network, that his Electric-vehicle charging demand, by location, % on the way, says James West of Evercore
holiday had gone less than smoothly be­ isi, a bank. But exactly how many public
Private
cause Ionity, a European charging net­ chargers are needed for each ev on the road
Public City Highway Countryside
work, provided too few points on the Bren­ is “an open question”, notes Bank of Amer­
ner Pass between Austria and Italy. “Any­ United States ica. Scott Bishop of Yunex Traffic, a divi­
thing but a premium charging experience,” 0 20 40 60 80 100 sion of Siemens, a German firm that makes
Mr Diess wrote. That vw part­owns Ionity 2020 charging hardware, hears many different
made the criticism sting more. answers when he asks insiders what share
2030*
Drivers can smell trouble ahead. Range of chargers should be slow versus fast.
anxiety and the availability of public Europe Another problem is the industry’s
charging is a huge issue (see chart 1). In a 0 20 40 60 80 100 structure. Aakash Arora of bcg’s automo­
recent survey by AlixPartners, a consultan­ 2020 tive practice calls its many complex layers
cy, in the seven countries that make up 2030*
the “gnarliest problem ll”. The need to
85% of global ev sales the cars’ high prices co­ordinate with and g ermission from
came third on the list of top five reasons China many parties helps ex n the slow roll­
not to switch to battery power; the four 0 20 40 60 80 100 out. First, there are fi that make the
others were all worries related to charging. 2020 chargers themselves. n there are the
To assess the scale of the challenge start 2030* operators. These might own the points,
with the basics. A big advantage of evs is Source: Boston Consulting Group *Forecast
earning money from charging. Or they
that they can be charged at home—or at might collect fees for maintaining char­
workplaces, if employers install chargers. gers operated by site­owners. Site­owners,
In America 70% of homes have off­street ship spreads from wealthier households to usually businesses, other private landlords
parking where a charger can be installed people living in flats or dwellings without or local authorities, provide the locations
(the equivalent figure is lower in Europe the ability to plug in, a public network be­ for chargers and charge rent to point­own­
and China). bcg estimates that in 2020 comes vital. In America, Europe and China ing operators. Service providers are mid­
home and workplace charging accounted demand for public charging is expected to dlemen who allow the charging to happen,
for nearly three­quarters of the total charg­ increase (see chart 2). Public chargers with apps or cards that give access to
ing energy use in America, seven­tenths in come in three varieties. A common kind is charge points and facilitate payment.
Europe and three­fifths in China. kerbside charging, via converted lamp­
Current ev models typically have bat­ posts or other dedicated points, where cars Watt a business
teries with ranges of around 400km. Some might park overnight. Then there is “desti­ Three kinds of firm are coming to rule the
go over 650km. The average American nation” charging, of the sort that is becom­ ev-charging roost. One is the vertically in­
drives 50km a day, according to Bank of ing more widely available in car parks at tegrated car giant. Tesla has not revealed
America. Europeans and Chinese drive shopping centres, restaurants, cinemas what it has spent on its “Supercharger”
less. Two types of charger are good enough and the like. Both kinds are level­2, with network, which now numbers 30,000
to top up vehicles, or give them a boost installation costs usually between $2,000 points worldwide. But it is probably several
overnight at home or during the working and $10,000 per point. billion dollars. Other car firms are follow­
day. The slowest, providing up to 8km of Fast charging, which typically adds 100­ ing, to a point. bmw, Ford, Hyundai and
range an hour, can do the job. So do “level 130km of range every 20 minutes, is vital Daimler are partners with vw in Ionity. Its
2” chargers that provide 16­32km. Both are on main roads for drivers making long in­ fast­charging network hopes to expand
easy on the wallet. Drivers can use dedicat­ ter­city trips and in cities for a quick emer­ from 1,500 points to 7,000 by 2025. Electri­
ed sockets that cost a few hundred dollars gency jolt. Commercial vehicles driving fy America, set up by vw in 2016 as part of
(and are often subsidised by governments) longer distances, such as taxis, need fast its settlement with American regulators
to tap the cheapest electricity tariffs. charging, too. But since charging firms over its emissions­cheating scandal, now
Nonetheless, home and workplace need to recoup hefty costs of $100,000 or has 2,200 fast chargers in the United
charging only gets you so far. As ev owner­ more per fast charger, using such facilities States. General Motors says it will spend
is pricey. To make life easier for customers, $750m on charging. Its first move will be to
Tesla’s mapping software directs its cars on install 40,000 points at dealerships.
Range anxieties 1 long journeys and works out the best route Specialist charging businesses are also
Electric vehicles, top five consumer concerns weaving through its dedicated “Super­ expanding. Several have gone public in the
% responding* charger” network. Other new ev models past year. None is profitable, and their rev­
2019 2021
come with similar features. enues are tiny for now, but their market
Charging­industry insiders point out, values are rising. The most richly valued (at
0 10 20 30 40 50 60
reasonably, that both ev ownership and around $7bn) is ChargePoint, which con­
Battery driving range charging are in their infancy. Pessimism is trols 44% of America’s public­charging
unwarranted, they argue, based on a few market and is expanding in Europe. evBox,
Not enough places short years of experience. Only one in 100 a Dutch firm, has 300,000 points world­
to charge
Costs are significantly
cars on the world’s roads is an ev, after all. wide, including a quarter of Europe’s pub­
higher than traditional Pat Romano of ChargePoint, one of the lic level­2 chargers and a third of fast­
vehicles world’s biggest charging firms, talks of the charging points. evgo has half the fast­
Charging takes too long start of “a 20­year arc”. charging market in America (excluding
Fair enough. Still, future demand for Tesla). But as Ryan Fisher of bnef notes, in
Charging the vehicle charging at scale is impossible to know as the next decade charging firms will have to
at home is not feasible
yet. Expansion is coming fast, say some. find business models that reliably produce
*In seven countries. Respondents
Source: AlixPartners select top three concerns
Along with the momentum from electro­ profits even if governments cut subsidies.
phile governments, the opportunity to A third category is energy firms. Fearful

012
 58 Business The Economist December 11th 2021

of losing business at petrol stations, they stall fast charging along inter­city routes. will provide current more swiftly.
are developing ambitious schemes. After Governments will act. America’s new Doubts about the ramp­up nevertheless
buying Ubitricity, a big European on­street infrastructure law sets aside $7.5bn for the persist. The numbers are still small rela­
charging firm, in February, Royal Dutch installation of 500,000 public points by tive to the vast scale of charging networks
Shell, an Anglo­Dutch oil major, said in Au­ 2030. Mandates such as that recently an­ the world needs. More money will be re­
gust that it planned to roll out 500,000 nounced in Britain requiring new homes, quired to update electricity grids to distri­
charging points around the world by 2025, workplaces and retail sites to have charg­ bute power to the new source of demand.
both kerbside and fast charging. bp and To­ ing points, adding 145,000 every year, are bcg forecasts that America, Europe and
tal have also been buying charging firms. likely to become more common. A reason China, home to most of the world’s evs,
Utilities are making a push, too. Wallbox, for optimism is that improvements in bat­ will have only 6.5m public chargers be­
part­owned by Spain’s Iberdrola, sells teries should continue to offer ever longer tween them by 2030—not enough to meet
chargers for homes and workplaces. The ranges, and so less need for frequent charg­ the iea’s global target of 40m. More cars
Electric Highway Coalition, made up of 17 ing. Newer batteries will be replenished will vie for each charger. Drivers may need
American power companies, plans to in­ more rapidly than today’s are, and chargers to seek patience as well as thrills. n

Bartleby The shortcuts to Theranos

The Elizabeth Holmes saga contains lessons for decision-makers of all kinds

E arly on in “The Inventor”, a docu­

mentary about Elizabeth Holmes, the
founder of Theranos, she talks about her
servers’ assessment of the managers'
competence leapt as a result.
Some of Ms Holmes’s charisma may
seems to have worked. Seasoned exec­
utives at large companies lauded Ms
Holmes for “owning the room”, but ig­
childhood­reading habits and her in­ likewise have been learned. Her defence nored warning signs that the firm’s
terest in what makes a great leader. “So team has entered two handwritten docu­ product did not work.
much changes in our society technologi­ ments into the court records. One is a note That may have been because of a
cally but as humans we don't change a in which she lays out a list of instructions second decision­making shortcut: many
lot,” she says in that slow, deep voice. to herself for the day ahead. The other is a investors and executives relied heavily
Whatever the verdict in Ms Holmes’s set of business rules penned for her by on the judgments of others rather than
ongoing trial, on charges of defrauding Sunny Balwani, Theranos’s one­time chief their own eyes. Large chunks of the trial
investors and patients by making false operating officer and Ms Holmes’s former have focused on the addition of the logos
claims about the startup’s blood­testing lover, whose own trial begins next year. of drugmakers like Pfizer and Schering­
technology, she is right about that. The (Ms Holmes’s defence rests in part on Plough, without their knowledge, to
story of Theranos is not simply about her allegations that she was abused, reports that seemed to validate Thera­
how its leaders behaved, and whether moulded and controlled by Mr Balwani, nos’s technology. A former chief finan­
they deliberately misled others. (Ms which he denies.) cial officer of Walgreens, a pharmacy
Holmes denies the charges.) It is also The documents themselves look ris­ chain that teamed up with the startup,
about how people take decisions. The ible. “All the laws of nature, all secrets, are testified that he thought the reports were
trial has shown how cognitive shortcuts imprinted on every cell of our body,” written by the pharmaceutical firms,
helped propel the firm to a valuation of writes Mr Balwani, a somewhat concern­ when in fact they had found the tech­
more than $9bn, before reporting by the ing statement from the leader of a medical nology wanting. Ms Holmes has said that
Wall Street Journal, revealing that its startup. Ms Holmes’s note includes lines she added the logos herself, claiming to
proprietary technology did not work, such as “I know the outcome of every have done so in good faith.
sent it spiralling towards oblivion. encounter”, “I constantly make decisions It is simply not practical to fact­check
One shortcut concerned Ms Holmes and change them as needed” and “My everything, or to run a business on the
herself. On the face of it, Theranos’s hands are always in my pockets or gestur­ assumption that all information has
product was a blood­testing device. In ing”. But the formula, if that is what it was, been doctored. There was no reasonable
fact, the firm’s real product was its foun­ way to infer from the documents that
der, a fundraising machine in a turtle­ Pfizer and Schering­Plough were un­
neck. Her charisma intoxicated inves­ impressed by Theranos’s devices. But at
tors, lured employees and charmed the some point due diligence has to extend
elder statesmen who crammed the start­ to seeing a technology in action.
up’s board. Her story—a female entrepre­ The story of Theranos is not just
neur who had dropped out of Stanford to about Ms Holmes’s guilt or innocence. It
disrupt the world of health care—was raises questions about Silicon Valley’s
catnip to journalists. “fake­it­till­you­make it” culture, in­
Charisma is a reasonable trait for vestors’ fear of missing out on the next
investors to like in a startup founder. But big thing and the scrutiny that private
people too easily equate confidence with firms receive compared with listed peers.
competence. In a study from 2012, re­ It is also about the thought patterns that
searchers from the University of Lau­ helped Ms Holmes soar. When you re­
sanne taught a bunch of mid­level man­ view a job candidate’s credentials or take
agers a set of “charismatic leadership comfort from logos on a website, when
tactics”—from three­point lists and you are blown away by someone’s charis­
moral conviction to hand gestures. Ob­ ma, ask yourself what you really know.

012
 The Economist December 11th 2021 Business 59

China Inc changes. Chinese companies cannot readi­

ly comply because officials in their home
The great country consider such materials to be
“state secrets”. The dilemma goes back a
reallocation decade but a law put into practice by the Se­
curities and Exchange Commission on De­
cember 2nd will purge all non­compliant
HO NG KO NG
companies from American bourses by
Want to own shares in Chinese
2024. That could have potentially painful
companies? Come to China
consequences for some investors.

I nvestors are still speculating about ex­

actly what Didi Global, a ride­hailing
giant, did to draw the ire of Chinese regula­
Many have held out hope of an eventual
agreement between American and Chinese
regulators that would revive a once­boom­
tors. Some say it foolishly pushed forward ing cross­border listing business. How­
with its $4.4bn initial public offering (ipo) ever, the suggestion that Chinese regula­
in New York despite being told by officials tors are behind Didi’s delisting—an un­
to delay the listing. Others suggest it stole precedented intervention by a foreign gov­
the thunder from leaders in Beijing by ernment in the American market—makes
kicking off trading on June 30th, the eve of a deal much more difficult to strike, says
the 100th anniversary of China’s Commu­ Jesse Fried of Harvard Law School.
nist Party. A second shift is the redirection of cap­
Whatever its sin, Didi now says it plans ital flows towards Chinese markets. Didi
to delist from New York and relist in Hong has been one of many Chinese tech groups
Kong. It has not specified its reasoning or in recent months to be hit with harsh regu­ Digital health
responded to queries on the move. It is lations. The campaign, which has been
possible that the company has been forced aimed almost exclusively at companies Psyber boom
to leave America by Chinese internet regu­ with overseas listings, has erased some
lators. This is a fiasco for the firm and its $1.5trn in shareholder value since Febru­
shareholders, such as SoftBank, a Japanese ary. Yet at the same time Chinese securities
investment group (whose share price has markets have experienced a windfall. In
sunk by 8% since the delisting announce­ particular, foreign holdings of Chinese
Dramatic growth in mental-health apps
ment). It also portends two big changes in stocks and bonds on the mainland have
has created a risky industry
how foreign investors will access Chinese nearly doubled between the start of 2019
shares in the future.
The first is the end of Chinese ipos in
America. Not long ago American exchang­
and September of this year, to about $1.1trn
(see chart).
The reallocation is mainly the result of
W hen carolina escudero was se­
verely depressed, going to a thera­
pist’s office became hard to face. So she
es were the leading destination for ambi­ two forces. One is the inclusion of Chinese joined BetterHelp, a popular therapy app.
tious Chinese firms. Alibaba, an e­com­ stocks and bonds in global indices, which She paid $65 each week but spent most of
merce behemoth which went public in has meant that index funds need to hold her time waiting for her assigned counsel­
New York in 2014, remains the largest them. Another is the fact that mainland ex­ lor to respond. She got two responses in a
American ipo in history. Didi was part of a changes host few of the pummelled online month. “It was like texting an acquaint­
recent groundswell of Chinese darlings groups, which mostly have American or ance who has no idea how to deal with
keen to tap America’s deep capital markets. Hong Kong listings. As a result, stocks list­ mental illness,” she says. BetterHelp says
Some 248 Chinese groups with a combined ed in Shanghai and Shenzhen are less ex­ its service does not claim to operate
market capitalisation of $2.1trn were trad­ posed to regulatory ire and more diversi­ around the clock, all its therapists have ad­
ing in New York in early October. fied, notes Alicia Garcia Herrero of Natixis, vanced degrees and “thousands of hours of
Those listings have already been threat­ a bank. That makes them particularly at­ hands­on clinical work”, and users are able
ened by American rules that require all tractive this year. As more Chinese compa­ easily to switch them if scheduling is hard.
listed firms to provide access to internal nies follow Didi from America to Hong Helping people to deal with mental pro­
auditing documents or be booted off ex­ Kong, or move to the mainland, even more blems has rarely been more urgent. The in­
capital could flow into China. cidence of depression and anxiety has
Many foreign investors expect Chinese­ soared in the pandemic—by more than
Capital return flight listed firms to be more attuned to its rapid­ 25% globally in 2020, according to the Lan-
China, domestic assets held ly changing regulatory environment, says cet, a medical journal. That, combined
by overseas entities, yuan trn Louis Luo of abrdn, an asset manager. And with more people using online services,
70 despite their willingness to crush foreign­ has led to a boom in mental­health apps.
Bonds
listed tech groups, the authorities are The American Psychological Association
60
Equities
much more sensitive to domestic market reckons 10,000­20,000 are available for
50 turmoil given the high level of retail in­ download. But evidence is mounting that
40 vestment from ordinary households. It is privacy risks to users are being ignored. No
30
hard to imagine regulators causing a local­ one is checking if the apps work, either.
ly listed group’s share price to collapse as Mental­health­tech firms raised nearly
20 Didi’s has. Rather, companies with regula­ $2bn in equity funding in 2020, according
10 tory challenges will henceforth need to to cb Insights, a data firm. Their products
0 sort them out before listing in China. Chi­ tackle problems from general stress to seri­
2014 15 16 17 18 19 20 21*
nese authorities have long hoped that their ous bipolar disorder. Telehealth apps like
Source: People’s Bank of China *To September
corporate darlings would list closer to BetterHelp or Talkspace connect users to
home. They are getting their wish. n licensed therapists. Also common are sub­

012
 60 Business The Economist December 11th 2021

scription­based meditation apps like The gig economy quence, Delivery Hero has reversed its de­
Headspace. In October Headspace bought cision to leave the German market alto­
Ginger, a therapy app, for $3bn. Now that How can we gether, by offloading its domestic busi­
big companies are prioritising employees’ nesses, Foodora, Lieferheld and Pizza.de,
mental health, some apps are working be heroes? to Takeaway.com (a Dutch firm that subse­
with them to help entire workforces. One quently merged with Just Eat) in order to
such app, Lyra, supports 2.2m employee focus on fast­growing Asia. In the summer
BE RLIN
users globally and is valued at $4.6bn. it launched a new app, Foodpanda, in Ber­
The European market is a tough terrain
Underneath, though, a trauma lurks in lin, Frankfurt, Hamburg and Munich.
for food-delivery firms
some corners of the industry. In October When it comes to other labour matters,
2020 hackers who had breached Vastaamo,
a popular Finnish startup, began black­
mailing some of its users. Vastaamo re­
D elivery hero has had a good run in
the past couple of years. In August
2020 it ascended to the dax, the stock­
however, things may be about to get tough­
er still. If a draft proposal in the works in
the European Union (eu) becomes law, as
quired therapists to back up patient notes market index of Germany’s most valuable many as 4m gig workers delivering meals
online but reportedly did not anonymise listed firms. It is present in 50 countries on or ferrying ride­hailers could be reclassi­
or encrypt them. Threatening to share de­ four continents. Revenue for the third fied as employees. This would entitle them
tails of extramarital affairs and, in some quarter was €1.8bn ($2bn), a jump of 89% to a minimum wage, sick leave and paid
cases, thoughts about paedophilia, on the compared with the same period in 2020. leave, unemployment benefits, health­
dark web, the hackers reportedly demand­ “We grew 100% before Corona, 100% dur­ and long­term­care coverage, and pen­
ed bitcoin ransoms from some 30,000 pa­ ing Corona and we will grow 100% after Co­ sion­insurance contributions.
tients. Vastaamo has filed for bankruptcy rona,” says Niklas Ostberg, the Berlin­ The eu estimates that the reclassifica­
but left many Finns wary of telling doctors based firm’s Swedish chief executive. tion could cost gig­economy firms around
personal details, says Joni Siikavirta, a law­ By number of orders Delivery Hero is €4.5bn a year. Like his counterparts in the
yer representing the company’s patients. more than twice as big as DoorDash, its business, Mr Ostberg insists that many of
Other cases may arise. No universal large American rival. Even so, DoorDash’s his riders choose to be freelancers because
standards for storing “emotional data” ex­ market capitalisation is $58bn, more than that lets them work as much as they want,
ist. John Torous of Harvard Medical School, that of Delivery Hero ($31bn) and Just Eat whenever they want. “More or less anyone
who has reviewed 650 mental­health apps, Takeaway.com ($13bn), the two big Euro­ can work for us at any time of the day,” he
describes their privacy policies as abysmal. pean food­delivery firms, combined. Euro­ says. But such arguments are increasingly
Some share information with advertisers. pean shares tend in general to underper­ cutting less mustard. In February Britain’s
“When I first joined BetterHelp, I started to form American ones. But another reason highest court ordered Uber (which runs
see targeted ads with words that I had used for investors’ caution is more specific to both food­delivery and ride­hailing apps)
on the app to describe my personal experi­ food delivery. Strict labour laws, a tradition to reclassify its drivers in London as em­
ences,” reports one user. BetterHelp says it of union organising, pricey unskilled ployees. Delivery Hero’s share price fell by
shares with marketing partners only de­ workers and stingy customers, who buy lit­ nearly 3% on December 3rd following re­
vice identifiers associated with “generic tle and tip rarely, make Europe the tough­ ports of the draft eu proposal.
event names”, only for measurement and est of all continents for the business. Such developments help explain why
optimisation, and only if users agree. No Mr Ostberg says that high labour costs couriers are getting more assertive. The
private information, such as dialogue with have become less of a problem in Europe, riders of Gorillas, a German online grocer
therapists, is shared, it says. because the efficiency of delivery has im­ with operations across Europe, have
As for effectiveness, the apps’ methods proved substantially in recent years. Euro­ clashed with management for months over
are notoriously difficult to evaluate. Woe­ pean consumers have also grown less par­ working conditions and pay. In October
bot, for instance, is a chatbot which uses simonious amid the pandemic boom in the firm sacked hundreds of riders who
artificial intelligence to reproduce the ex­ online shopping of all kinds. As a conse­ had participated in strikes, which further
perience of cognitive behavioural therapy. fuelled tensions. In late November a labour
The product is marketed as clinically vali­ court in Germany rejected the manage­
dated based in part on a scientific study ment’s attempt to stop Gorillas riders from
which concluded that humans can form electing an in­house works council, which
meaningful bonds with bots. But the study they duly did. The firm’s executives grudg­
was written by people with financial links ingly had no choice but to say they will
to Woebot. Of its ten peer­reviewed reports work with workers’ representatives.
to date, says Woebot, eight feature partner­ All this is happening as competition in
ships with a main investigator with no fi­ Germany intensifies. Delivery Hero will
nancial ties to it. Any co­authors with fi­ have to invest some €120m in German sales
nancial ties are disclosed, it says. and marketing in 2022, reckons Jürgen
Mental­health apps were designed to be Kolb of Kepler Cheuvreux, a financial­ser­
used in addition to clinical care, not in lieu vices firm. It is now competing with Liefe­
of them. With that in mind, the European rando, which dominates the German mar­
Commission is reviewing the field. It is ket (and is owned by Just Eat Takea­
getting ready to promote a new standard way.com), Uber Eats, which launched in
that will apply to all health apps. A letter­ April, and Wolt, a Finnish firm recently ac­
based scale will rank safety, user friendli­ quired by DoorDash for €7bn. Last month
ness and data security. Liz Ashall­Payne, DoorDash launched under its own brand in
founder of orcha, a British startup that Stuttgart. The next few years look poised to
has reviewed thousands of apps, including be dog­eat­dog in German food delivery.
for the National Health Service, says that Consumers can count on full bellies, cour­
68% did not meet the firm’s quality crite­ tesy of the gig firms. Their shareholders
ria. Time to head back to the couch? n A great business, except for a few riders may go hungry. n

012
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012
 62 Business The Economist December 11th 2021

Schumpeter Big labour v big business

American companies are working out how to respond to a trade-union revival

can predecessor, Donald Trump, and pushed to undo older rules,
some dating back to the days of Harry Truman. In late November
the nlrb voided the result of the unionisation vote at Amazon’s
Alabama warehouse, which the e­commerce giant carried by more
than two to one, and on December 7th it allowed vote­tallying at
three Starbucks cafés to go ahead.
More densification efforts are afoot. Two bills to expand labour
power directly are unlikely to go anywhere, given the Democrats’
slim majorities in both houses of Congress. But worker­friendly
provisions have been sewn into other legislation. The new biparti­
san infrastructure law directs spending to projects with union la­
bour. Mr Biden’s $2trn social­ and climate­spending bill, which
has passed the House, includes the tax deductibility of dues and
tax credits for electric cars made by unionised workers (as well as
heavy fines for labour­law violations). A report of a “whole­of­gov­
ernment” task­force set up by the White House to come up with
pro­labour policies that could be advanced without new laws is
due out any day. It has received more than 400 suggestions.
This revival of organised labour could yet turn out to be a blip.
Previous ones petered out; a series of strikes in 1945­46, accompa­
nied by rising inflation, soured the public mood and led to the pas­
sage of the more restrictive legislation that remains in force to this

A sked what labour wanted, Samuel Gompers, founding presi­

dent of the American Federation of Labour in the late 1800s, is
often quoted as responding: “more”. His actual answer was sur­
day. Unionisation rates have been declining for decades across the
West, not just in America. Still, companies are not taking any
chances. They are pursuing two main strategies.
prisingly lyrical. “More schoolhouses and less jails…more learn­ The first one is to keep quiet. Rather than inveigh against new
ing and less vice…more leisure and less greed…more of the oppor­ labour rules, companies are keeping a low profile. They are operat­
tunities to cultivate our better natures.” His ability to tie loftiness ing through big business groups such as the National Association
to pragmatic demands for better wages and working conditions of Manufacturers and the us Chamber of Commerce. Both have
helped make the labour movement a powerful and popular force. been lobbying furiously against pro­labour provisions under con­
After years in decline, big labour is regaining both power and sideration in Congress, with some success.
popularity. Joe Biden, whose political career began in the union­ If firms have no choice but to respond directly, as when facing a
friendly 1960s, has vowed to be the most pro­union president in unionisation drive, they also proceed discreetly. Most ceos avoid
history. Feeling newly empowered, workers have staged 241 big public statements on such matters. Their comments, says a long­
strikes this year, 58 of them in November alone. Unions are pop­ time labour lawyer, can be used as evidence of unfair labour prac­
ping up in surprising places. Last month curators at Boston’s Mu­ tices or provoke a customer backlash. When they do speak up, it is
seum of Fine Arts, who set one up last year, downed catalogues for in anodyne terms such as praising the “direct relationship” be­
a day. On December 3rd Liz Shuler, new head of the afl­cio, the tween employer and employees, as Starbucks’s boss, Kevin John­
successor umbrella group to Gompers’s organisation, said big tech son, did this week. Businesses also rely on third­party consultan­
is the next frontier to be organised. Workers at Alphabet and Kick­ cies and specialised law firms to conduct surveys to gauge worker
starter have already set up unions. Amazon is in the midst of a pro­ dissatisfaction (which may lead to disputes and, eventually, union
tracted conflict at a warehouse in Alabama. All this is going down drives), and organise message bursts and workshops to help con­
well with Americans. Public support for unions has reached 68%, vince workers (unthreateningly, since anything else would be ille­
according to polling by Gallup, a level not seen in half a century. gal) that union dues is not money well spent.
That presents a pickle for businesses. On the one hand, they are
already dealing with a tight labour market. On the other, taking on Fruits to their labour
unions risks angering consumers and potential hires, as well as The second strategy involves being very loud indeed. Companies
the president. To balance these competing objectives companies are publicising higher wages and benefits. In October Starbucks
must tread carefully. announced its third rise in just over a year. It will pay baristas at
These days the first­order answer to the Gompers question giv­ least $15 an hour by 2023, more than twice the federal minimum
en by both the Biden administration and big labour is “more trade wage. Amazon has set a floor at $18 for new employees, plus sign­
unions”—or, as the labour movement and its supporters put it, an ing bonuses and other perks. Other firms have no choice but to fol­
increase in the “density” of union representation. Only then, the low suit. According to the Bureau of Labour Statistics, compensa­
reasoning goes, will better pay, benefits and working conditions tion for non­union private­sector employees rose by 1.4% in the
follow. The primary objective has been pursued vigorously. Min­ third quarter, compared with the second, the biggest jump in a de­
utes after his oath of office in January Mr Biden dismissed the gen­ cade. The Conference Board, a business­research outfit, finds that
eral counsel of the National Labour Relations Board (nlrb), who companies expect to raise pay by 3.9% in 2022 on average, the
acts as the de facto government prosecutor in labour­manage­ most since 2008. A lot of this is the result of a worker shortage.
ment disputes. The general counsel’s office has since reversed That it helps pre­empt union demands is a welcome side­effect.
procedures adopted under Mr Biden’s more pro­business Republi­ One thing is clear. Organised or not, it is labour’s moment. n

012
 Finance & economics The Economist December 11th 2021 63

→ Also in this section

64 Policing remote work
65 Is China easing?
65 Tricky questions for the ECB
68 The economics of railways
68 America’s nominal GDP overshoots
69 Buttonwood: Top dollar
70 Crypto lobbying takes off
71 Free exchange: The fertility transition

Worker power now generates more user comments a day

than the “WallStreetBets” subreddit, which
All mouth and no trousers moved stockmarkets earlier this year.
The term is elastic, but in essence it
makes the proposition that the pandemic
has provoked a cultural shift in which
workers reassess their priorities. People in
low­status jobs will no longer put up with
SEATTLE
bad pay or poor conditions, while white­
Evidence for the “great resignation” is thin on the ground
collar types scoff at the idea of working

A s the effects of the Spanish flu waned

in 1919, Seattle’s workers agitated. Ma­
ny were fed up with long hours and poor
has called the “great resignation”. That
memorable term has quickly become a cor­
porate buzzword, spouted on companies’
long hours. Some people have become lazi­
er or feel more entitled; others want to try
something new, or desire money less be­
pay, especially at a time of high inflation. earnings calls and at cocktail receptions. It cause they have come to appreciate the
Shipyard workers went on strike, leading has also made waves online. An “anti­ joys of a simpler life. This is, supposedly,
others to down their tools in solidarity. work” message board on Reddit, a social­ leading to a tsunami of resignations and
Newspapers were filled with stories of ma­ media site, is filled with screeds against dropouts. There is just one catch: the theo­
chinists, firefighters and painters quitting the demands of greedy bosses. The forum ry has little hard evidence to support it.
their jobs. Events in Seattle sparked labour The great­resignation thesis seems
unrest across the rest of America and even strongest in America and Britain. In Octo­
much of the rich world. Bosses worried Quitting the day job 1 ber 4.2m Americans quit their jobs, equiv­
that the lower classes had become work­ United States, share of workers voluntarily alent to nearly 3% of total employment,
shy anti­capitalists. leaving their jobs, % of total employment close to the record (see chart 1). In the third
Seattle once again seems like ground 3.0 quarter of the year nearly 400,000 Britons
zero for a big shift in labour relations. In moved from one job to another after hand­
October the local carpenters’ union fin­ 2.5 ing in their notice, the highest­ever level.
ished a weeks­long strike over pay and 2.0 Employers may be responding to the threat
conditions. Hotels and shops remain un­ of further departures, too. A tracker com­
derstaffed. Local tech firms, worried about 1.5 piled by Goldman Sachs, a bank, suggests
losing staff, have raised average salaries by 1.0 that wage growth in both countries is
nearly 5% since 2020. Microsoft, one of unusually strong (see chart 2 on next
them, claimed earlier this year that 46% of 0.5 page). A weak jobs report for America, re­
the global workforce was planning to make 0 leased on December 3rd, seemed to con­
“a major pivot or career transition”. 2002 05 10 15 21
firm how hard it has become to hire staff
Seattle seems like an example of what Source: Bureau of Labour Statistics
even as vacancies remain sky­high. The
Anthony Klotz of Texas a&m University world’s largest economy added just

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 64 Finance & economics The Economist December 11th 2021

210,000 jobs in November, below econo­ job satisfaction, is near its all­time high: both countries resignations sank during
mists’ expectations of 550,000. hard to square with the notion that lots the worst of the pandemic in mid­2020.
In other parts of the rich world, how­ more people are desperate for a way out. Many people who would like to have left a
ever, a great resignation is harder to spot. It That suggests two more prosaic expla­ position last year may only now have
is certainly true that millions have nations for soaring quit rates. One relates plucked up the courage to do so. Account
dropped out of work. Our best guess is that to vacancies. When there are lots of open for these “pent­up” resignations, and the
the labour force in the rich world is 3% positions, people feel more confident recent pickup looks even less unusual.
smaller than it would have been without about handing in their notice, even if they Could a truly “great resignation” ever
covid­19, a deficit of 20m people. Yet out­ rather like their job. They may also be emerge? It would probably require more
side America and Britain there is little sign poached. Vacancies are high right now radical cultural changes. Households
that this reflects more people quitting. partly because the pandemic has led to would need to decide, en masse, that their
In November 107,000 Canadians who surging demand in new sectors (say, ware­ future consumption needs, and the in­
had left their jobs within the past year did houses for online retail). Analysis of Amer­ come needed to fulfil them, were substan­
so because they were “dissatisfied”, down ica by Jason Furman of Harvard University tially lower. That would mean no more for­
from 132,000 on the eve of the pandemic. and of Britain by Pawel Adrjan of Indeed, a eign holidays, less dining out and fewer
In Japan the number of unemployed peo­ job­search site, suggests that job quits are household appliances. It would also mean
ple who had quit their previous job is near at the level you would expect them to be, fewer Christmas presents. Anyone who
an all­time low. There are hints of a small given the number of vacancies. visited a Black Friday sale this year, in Seat­
rise in resignations in Italy, but across the Messrs Furman and Adrjan’s analysis tle or elsewhere, would be quickly dis­
eu as a whole the flow of people from work may nonetheless underestimate how un­ abused of the notion that such a dramatic
into leisure is lower than before the pan­ remarkable the surge in quits truly is. In shift was on the cards. n
demic. Data from New Zealand on labour­
market flows look entirely unremarkable.
And in many places there is little sign that Work and the pandemic
workers are getting antsy, which you might
think could presage a rise in resignations.
Only disconnect
The number of industrial disputes in Aus­
tralia continues to trend downwards. Col­
The difficulties of policing remote work
lective disputes are “facing extinction”, ac­
cording to a recent issue of Japan Labour Is-
sues, a journal. If the pandemic has
changed workers’ outlook on the world,
A s office life approaches some sort
of new normal, remote working is
here to stay. Employers enjoy cost sav­
workers have plenty of incentive to pick
up a call from their boss long after 5pm
has come and gone; by comparison they
they are hiding it pretty well. ings as they spend less on desks and floor stand to gain little from reporting vio­
Other factors, then, probably help ex­ space. For employees the promise is of lations of the law and landing their
plain the decline in the labour force. Many time saved: spared of their commute, employer with a fine.
people still say they are fearful of catching they can get their work done and focus Then there is the practical difficulty
covid­19 and may therefore be avoiding on their families and hobbies. That, at of agreeing on when workers should be
public spaces, for instance. Immigrants least, is the idea. But, as many a remote contactable, something that is often left
have returned to their home countries. employee knows, the boundary between to be negotiated between employer and
Even if a wave of resignations is largely work and home life can blur. employee. In France and Italy there is no
an Anglo­American phenomenon, is there Some governments and employers obligation to find an agreement. Aside
any evidence that the people who are quit­ are trying to restore balance. In Novem­ from one widely publicised court deci­
ting are doing so because they have be­ ber Portugal announced legislation that, sion in 2018 ordering a pest­control
come work­shy? Reddit posts aside, this according to Ana Mendes Godinho, its company to pay €60,000 to an employee
does not seem to be the case. In Britain a labour minister, seeks to make the most it had required to be reachable at all
tenth of workers say they would like a job of teletrabalho (remote work) while miti­ times in case of an emergency, little has
with fewer hours and less pay—but that is gating the downsides. Bosses are now come of the law in France. Even Ms
in line with the long­run average. A recent banned from calling their employees Mendes Godinho’s office communicated
study by Gallup, in America, suggests that “after hours”: those who make contact with your correspondent at 7pm.
“employee engagement”, a rough proxy for outside previously agreed times could be Perhaps change must come from
fined more than €9,000 ($10,000). Em­ within. In Japan, where toiling any less
ployers are also required to provide than 50 hours can be interpreted as a lack
We’ll pay, will you stay? 2 remote­working equipment and reim­ of commitment to the job, half of all
Wages*, % change on a year earlier burse electricity and internet costs, and workers were already back in the office at
6
must hold in­person meetings twice a least three days a week by April 2021. But
Britain month, to help combat isolation. even there employers are responding to
Several European countries had simi­ workers’ demands for a better work­life
4 lar rules in place even before covid­19. In balance. Fujitsu, a technology giant, has
Germany
US 2017 the “right to disconnect”, which introduced flexible hours and allows
2 allowed workers to ignore after­hours remote work. Elsewhere, the number of
texts, emails or calls from their bosses chief remote officers is proliferating. But
0 without fear of repercussion, took effect few companies have gone as far as Volks­
in France. Italy followed soon after. wagen. For the past decade, the German
Japan Earlier this year Ireland said workers carmaker’s servers have ensured that
-2
could disregard late emails and calls. employees covered by a collective­pay
1999 2005 10 15 21 Whether legislation can bring hours agreement do not receive work emails on
*Corrected for pandemic-
Source: Goldman Sachs related distortions
down, though, is unclear. Ambitious their phones between 6.15pm and 7am.

012
 The Economist December 11th 2021 Finance & economics 65

Monetary policy (1) Monetary policy (2)

Giving less generously
Is China easing? China, measure of domestic policy easing,
standard deviations from the mean
Emergency exit
0 0.5 1.0 1.5 2.0 2.5 3.0

HO NG KO NG
2008-09
Yes. Through a combination of Two hard questions for the European
words and deeds 2015-16 Central Bank

B en bernanke, the former chairman of

America’s Federal Reserve, entitled his
memoir “The Courage To Act”. But a lot of
2019-20 C entral bankers in Frankfurt may be
feeling a little discombobulated. Hav­
ing struggled to revive too­low inflation
what central bankers do these days is talk. for the best part of a decade, they now find
2021 → Higher values
They talk about what they are doing, will indicate greater easing
themselves hoping that too­high inflation
do and might do. In central banking, words Source: Goldman Sachs
will die down. Since the pandemic struck,
can speak louder than actions. the European Central Bank (ecb) has
China is no different. Its macroeco­ bought nearly €2trn ($2.3trn) in govern­
nomic policymaking is a combination of the macroeconomic tone for 2022, it em­ ment bonds in order to soothe markets and
acts and signals, execution and exegesis. phasised expanding domestic demand and gin up the economy (see chart). Now it
On December 6th, for example, the People’s preserving the “six stabilities” (in employ­ must consider whether such quantitative
Bank of China announced that it was cut­ ment, finance, trade, foreign and domestic easing (qe) remains appropriate. That in­
ting the reserve requirement ratio (the investment, and expectations). The Polit­ volves grappling with two questions at its
amount of money banks are required to buro also had some words of comfort for next policy meeting on December 16th:
hold in reserve, as a share of deposits) by the beleaguered property market. It said whether the euro area has truly escaped its
half a percentage point, from a weighted the sector should be supported to better low­inflation trap, and whether asset pur­
average of 8.9% to 8.4%. That, it said, serve homebuyers’ “reasonable” demand. chases have outlived their usefulness. The
would “unleash” about 1.2trn yuan (“Reasonable” was not defined. But it is first is easier to answer than the second.
($190bn) of funding. safe to say it does not include buying a Inflation in the euro area, as in much of
The cut was, you might think, a property and keeping it vacant in the ex­ the rest of the world, is soaring. Consumer
straightforward act of easing—an under­ pectation of selling it for a higher price.) prices rose by 4.9% in November, com­
standable response to a slowing economy, The debate now is not whether China’s pared with a year ago, the fastest pace in
a mutating virus and the financial risks policymakers are easing but by how much. the history of the single currency. Many of
posed by property developers, two of Because stimulus can take many forms, es­ the ecb’s rich­world counterparts, includ­
which (Evergrande and Kaisa) defaulted on pecially in China, measuring its overall ing the Federal Reserve and the Bank of
their offshore bonds, according to Fitch, a scale is not easy. One attempt to do so, by England, are worried that inflation could
rating agency, shortly after the cut. Goldman Sachs, a bank, combines indica­ become entrenched. In the euro area, how­
But the decision was accompanied by tors of monetary policy (the benchmark ever, the greater likelihood is perhaps that,
some cautionary talk. “The stance of sound lending rate and market rates), credit poli­ once disruptions from the pandemic fade,
monetary policy remains unchanged,” the cy (including reserve requirements), fiscal it still undershoots the ecb’s 2% target.
central bank said. It also pointed out that policy and housing policy into a single in­ To see this, consider the differences be­
banks will need part of the additional dex. In the face of the global financial cri­ tween economic conditions in the euro
funds (about 80% of them) to repay medi­ sis, this index swung by almost 2.9 points zone and America. There is less evidence of
um­term loans from the central bank that on its scale (see chart). It swung by a little booming demand in Europe. Output is still
are due to mature on December 15th. Much over two in response to China’s 2015 slow­
of the extra money would, in other words, down and by a little less than two after the
soon return to the institution that had un­ pandemic began. Amassed assets
leashed it. The impact of the cut “is likely The easing in the first ten months of European Central Bank, stock of asset purchases
to be neutral”, said one analyst, quoted by this year was modest by comparison. The
Economics Daily, an official newspaper. An latest reserve requirement cut will add to €trn
editorial in the same paper cautioned it, but not by much in itself. Policymakers 5
against the “relatively simplistic” view that therefore have plenty of scope to loosen Pandemic Emergency 4
a cut in reserve requirements amounted to before they can be accused of replicating Purchase Programme (PEPP)
“loose” macroeconomic policy. the “flood” of stimulus in 2008­09, which 3
So are China’s policymakers easing or has acquired a reputation for profligacy, 2
not? The short answer is yes, they are in­ despite its brute effectiveness in returning Asset Purchase 1
deed easing. But not without qualms and China to its pre­crisis economic trajectory. Programme (APP)
qualifications. They want to stabilise If China’s policymakers had an equiva­ 0
growth. But they do not want to revive lent index of their own, their cautionary 2015 16 17 18 19 20 21
speculation, especially in property. Their talk could be more precisely calibrated.
expansionary actions are therefore accom­ “We may ease by one point but not two,” As % of euro-area GDP*, Nov 2021
panied by a lot of clarificatory and caution­ they might say. In the absence of such a
ary chitter­chatter. measure, China­watchers have the harder 0 5 10 15 20 25 30
Perhaps the clearest evidence of easing task of inferring macroeconomic inten­ APP
lies not in the deeds of the central bank but tions from vague party slogans. How many PEPP
in the words of the Politburo, the 25­mem­ cuts in reserve requirement ratios, one
Sources: European Central Bank; *GDP in 2020,
ber body that oversees the Communist Par­ wonders, will be necessary to preserve the Eurostat; The Economist at market prices
ty. After a meeting on December 6th to set six stabilities? n

012
012
012
 68 Finance & economics The Economist December 11th 2021

slightly below its pre­covid level, whereas South­East Asia

it is well above it in America. Fiscal stimu­
lus in the euro area has been less generous. On the rails
Meanwhile, one­off disruptions seem
to have played a bigger role in Europe.
About half the inflation rate in November
reflected surges in food and energy prices,
which are unlikely to last. Other pandem­
HONG KONG
ic­related factors, including a temporary
The economics of a new train line
value­added­tax cut in Germany last year,
have also played havoc with the base used
to calculate annual inflation. Strip these
out, by comparing “core” prices today with
I n the late1860s, French sailors who had
set off from Saigon to find the source of
the Mekong river encountered the precipi­
those in 2019, and annualised inflation tous Khone Falls between Laos and Cambo­
falls below 1.5%, said Fabio Panetta, a dia, and realised that the waters would be
member of the ecb’s council, in November. impassable for larger trading vessels. Their
(The measure exceeds 3% in America.) dreams of reaching the riches of southern
Hawkish types would argue that even China by river were dashed. Quixotic plans
temporary disruptions could generate for rail networks followed, first from Brit­
“second round” effects, by becoming em­ ish and French imperialists, and then from
bedded in wage demands. But a strong the Association of South­East Asian Na­ Bridging the income gap
pickup in wage growth is yet to material­ tions (asean), which in 1995 outlined its
ise, and measures of inflation expectations ambition to connect Singapore with Kun­ termediate goods, between America and
are, on average, just below 2%. After its ming, in China’s Yunnan province. India, and up from 15th place a decade ago.
year­long strategy review concluded in the On December 3rd, at long last, a portion China’s intermediate­goods trade with
summer, the ecb promised to raise interest of those aspirations was realised. A high­ Cambodia and Laos has risen nine­ and 11­
rates only if it expected inflation to reach speed rail line connecting Kunming to fold, respectively, in the same time.
2% in the coming one to two years and stay Vientiane, the capital of Laos, was opened The strategy has historical precedent.
there. Those criteria do not seem to have after five years of construction. The route Until the 1970s Japanese firms’ main inter­
been convincingly met. is part of China’s Belt and Road Initiative, est in South­East Asia was buying raw ma­
What about the need for qe? The Bank and the completed section comes with a terials. Then they began moving produc­
of England is soon due to stop making new hefty price tag of $5.9bn—equivalent to tion to the region. The shift took off after
bond purchases; Jerome Powell, the head nearly a third of Laos’s annual gdp before the Plaza Accord of 1985, at which Japan
of the Fed, has said that he will start to tap­ the pandemic. agreed to let the yen appreciate, which
er purchases more quickly. But in the euro For China, the rationale for closer links widened the gap between domestic wages
area the answer is muddy precisely be­ with South­East Asia is clear. Rising facto­ and those in low­cost countries. Firms
cause the inflation picture is different. ry wages at home make the case for moving were able to preserve their competitive ad­
Some on the ecb’s council, including Isa­ low­complexity manufacturing to cheaper vantage by moving, while also fostering
bel Schnabel, point out that the unwanted nearby locations. In 2019 Vietnam was Chi­ technological expertise elsewhere.
side effects of asset purchases are rising, na’s fourth­largest trading partner for in­ What does the new train line mean for
and the gains are diminishing. The ecb
will therefore be better off providing guid­
ance on its interest rates to steer markets.
Fast and furious
One undesirable consequence of qe could
United States, nominal GDP
be that central banks are now big players in
government­bond markets: the ecb holds
more than 40% of outstanding German $trn % change, annualised
24
and Dutch sovereign bonds, according to Components: Real GDP† Inflation
Pre-covid trend*
estimates by Danske Bank. 0 1 2 3 4
The expiry in March of one of the ecb’s 22
CBO February Recovery from the
bond­buying schemes, which was intend­ Actual 2021 forecast Great Recession‡
ed to counter the financial­market effects 20
of the pandemic, could provide an oppor­ 2010s economic
18 expansion§
tunity for the ecb to stop expanding its
footprint in bond markets. But not every­ Recovery from the
one agrees on the need to scale back asset 2019 20 21 covid-19 pandemic‡
purchases. Many economists expect the *Based on average quarterly growth rate for the five years before the pandemic
†2012 prices ‡5 quarters after real GDP trough, compared with the pre-crisis peak §Q2 2009 to Q4 2019
ecb instead to top up another existing as­ Sources: Bureau of Economic Analysis; Congressional Budget Office; Federal Reserve Bank of St. Louis; The Economist
set­purchase programme in the coming
months, so as to ensure that bond­buying
Nominal sums
does not tail off too rapidly. Mr Panetta has
worried that too sharp a reduction in asset America may be suffering from high inflation but its nominal gdp, which combines
purchases could lead to a “premature in­ output and prices in a single measure, was almost exactly at its long­term trend in the
crease in long­term interest rates”. In other third quarter. It has blown past forecasts made before President Joe Biden introduced
words, if the ecb’s ultimate problem is that $1.9trn in fiscal stimulus in March. Some doves argue that the return to trend is a sign
inflation is too low, rather than too high, that policy has been well­calibrated, unlike after the global financial crisis. But nominal
then it may not have the luxury of doing gdp may now be overshooting: many forecasters think it is growing at double­digit
away with qe. n annualised rates in the fourth quarter, as stimulus fuels fast growth and high inflation.

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 The Economist December 11th 2021 Finance & economics 69

Laos? The landlocked country suffers most Development Bank Institute last year sug­ would yield greater economic benefits for
from South­East Asia’s limited connectivi­ gested that the investment was unlikely to everyone, but that is outside any one coun­
ty. The World Bank has been cautiously op­ be profitable given its expense. Opinions try’s control. Thailand approved the first
timistic about the new route: Vientiane, it of the Belt and Road Initiative have soured step of a Chinese­built high­speed line in
reckons, could become a logistical hub in­ since 2016, and fears have risen that the in­ March; it is intended to reach the Lao bor­
to China from Thai ports, but only if the frastructure acts as a debt trap which gives der at a later stage. Even the first half is not
Lao customs system were made more effi­ China influence over borrowers. Laos has expected to be completed for five years,
cient and connecting roads improved. Al­ assumed 30% of the liability for the pro­ however, and such schemes often miss
though Laos has a land border with Yun­ ject, most of the funding for which was their deadline, if they materialise at all.
nan and no coastline, as recently as 2016 al­ borrowed from the Export­Import Bank of The Malaysian government is studying a
most two­thirds of its exports to China China. Nor will the line bring in Chinese high­speed link to Bangkok, but serious
were transported via maritime routes. tourists for the foreseeable future, given discussion has barely begun. Until those
Other assessments, however, are less China’s zero­covid policy. longer­term benefits arrive, Laos may
optimistic. A paper published by the Asian A wider network across the region mainly be stuck with the bill. n

Buttonwood Top dollar

The three conditions for the greenback to crack in 2022

T here is something slightly tedious

about the dollar’s rude health. It
seems as inevitable as lying politicians
investors are loading up on bonds and
stocks, which are now a bigger part of
their benchmarks. Meanwhile less money
never quite reopened fully. And there is
fiscal stimulus from the eu recovery
fund in the pipeline. America may still
and stormy winters. The dxy, a gauge of is leaking out. Spending abroad by Chi­ lead the pack. But the race will be closer.
the dollar against half a dozen other nese tourists has all but vanished, as a A second condition is lower inflation.
rich­world currencies, is up by almost consequence of travel bans. Still, the risks Oil prices have fallen already. There are
7% since the start of the year. The broad seem tilted towards a fall in the yuan tentative signs that bottlenecks are
dollar index, which measures the dollar against the dollar. China is leaning to­ easing. Business surveys in goods­pro­
against 26 of America’s trading partners, wards a looser monetary setting, as policy­ ducing hubs, such as Taiwan and Viet­
has also risen markedly since June. It is makers grapple with distress in the prop­ nam, show a pickup in delivery times. If
difficult to imagine what might check its erty sector. This week’s reduction in re­ these developments translate into lower
rise. But it is still worth trying. You may serve requirements might even be a hint headline inflation, says Mansoor Mohi­
find that the case for a reversal of the that Beijing would prefer a weaker yuan. uddin of the Bank of Singapore, it will
dollar in 2022 is more plausible than you Put this all together, and the argument allow the Fed to pivot towards a less
had thought. for a strong dollar looks watertight. But hawkish stance—a third condition for a
The dollar’s current strength is tied to the situation is fluid. There is a decent weaker dollar. It is hard to be an interest­
American exceptionalism of a sort. The case that the dollar will peak in the com­ rate dove when inflation is so high. But if
s&p 500 index of leading shares consis­ ing months and then weaken. For that to it falls back during 2022, and the econ­
tently outperforms the stockmarkets of happen, three conditions need to be ful­ omy slows, the Fed’s focus could easily
other countries. America’s economy has filled. First, the global growth gap must tip back to the “jobs” part of its mandate.
proved to be a reliable source of growth. narrow. America’s economy has more than By the spring or early summer, markets
It has emerged from the pandemic more recovered. Other countries still have may find themselves pricing in more
strongly than just about anywhere else. ground to make up. They will eventually interest­rate rises than the Fed is minded
After a brief loss of energy in the summer do so. Too much of the sluggishness of to deliver.
it is now showing renewed vigour. Asia is put down to China’s slowdown and It is easy to forget, but other central
As a consequence, inflation is stub­ not enough to the lingering effects of the banks get to do monetary policy, too. A
bornly high. The chairman of the Federal pandemic across the region. Europe has recovering euro­zone economy might
Reserve, Jay Powell, has already said that easily stir the hawks at the European
the Fed will move faster towards ending Central Bank, says Kit Juckes of Société
its bond purchases, thus paving the way Générale, a bank. Even the hint of an
for interest­rate increases. Elsewhere interest­rate rise in the euro zone could
things are running less hot. China’s gdp be a game­changer for currency markets.
growth is sluggish. In Europe a wave of For dollar bulls, this might all sound a
covid­19 infections has led to some re­ bit far­fetched. A lot of their enthusiasm
strictions on business activities. And is tied to high inflation and its implica­
while the full implications of the Omi­ tions for interest rates. But this carries
cron variant are not certain, there is a dangers. Inflation is not a high­quality
general feeling it will prove to be more of reason for backing a currency, says Ste­
an economic headwind outside America. ven Englander of Standard Chartered,
One currency that has kept up with another bank. Quite so. If inflation in
the dollar is the yuan. This is because America proves stubborn in the medium
more money is flowing into China than term, that is not obviously good for the
out of it. Bumper exports to America dollar either. For now, the greenback is a
have contributed to a huge trade surplus. winning currency. But there are still a
Portfolio capital is washing in. Foreign few ways it could lose.

012
 70 Finance & economics The Economist December 11th 2021

Digital assets Vyas of Korn Ferry, a headhunting firm,

says senior risk managers are typically
Crypto’s crew promised a salary of $600,000­2m; former
high­ranking regulators are also locked in
with share options worth tens of millions
of dollars, which vest over many years. The
ex­head of an American regulator, now at a
crypto group, says he spends a lot of time
As regulators toughen up on crypto, lobbying is going ballistic meeting lawmakers and civil servants.
The industry is also hiring lobbyists.

B etween 2017 and mid­2021 the Com­

modities Futures Trading Commission
(cftc), America’s derivatives­markets reg­
A third set of rules involves financial
regulation: protecting consumers from
fraud, reducing systemic risk and ensuring
Based on public disclosures The Economist
calculates that crypto firms spent around
$5m lobbying the American Senate in the
ulator, was one of the agencies that dis­ fair competition. Market watchdogs are first nine months of 2021. About $2.5m of
cussed crypto the most. Brian Quintenz, pondering whether digital assets count as that was spent between July and Septem­
who ran its technology committee, was re­ securities, which require heavy disclo­ ber—a quadrupling over the same period
sponsible for much of that, organising pre­ sures from issuers, or as commodities, last year. Such activities employ the equiv­
sentations on everything from the integri­ where the (lighter) onus is on exchanges to alent of 86 full­time staff, up from just one
ty of bitcoin spot markets to the subject of prevent market manipulation. Gary Gen­ in 2016. Coinbase, a big crypto exchange,
decentralised finance. “I developed a repu­ sler, the head of the sec, has said he wants doled out $625,000 on lobbyists in the
tation as being…an advocate of innova­ tougher policing of the crypto “Wild West”. third quarter alone. Block, a crypto­friend­
tion,” he says. The eu is preparing rules that force crypto ly payments firm, has spent more than
In September Mr Quintenz joined An­ firms to seek licences and ban tweets $1.7m since April 2020. The campaign is al­
dreessen Horowitz, a venture­capital firm meant to manipulate markets. Officials so ramping up in Brussels, the eu’s de facto
and an investor in crypto startups, as an seem keenest to tame stablecoins, tokens capital, where the industry has deployed
adviser. He is only one of many former that are pegged to conventional money. the equivalent of 52 full­time lobbyists.
American officials to have flocked to the Some big firms are trying to pre­empt
cryptoverse. Others include Jay Clayton, How to win friends stricter rules by making proposals of their
the previous head of the Securities and Ex­ Until recently most crypto firms, some of own: Andreessen, for instance, is pressing
change Commission (sec); Brian Brooks, which aspire to a libertarian Utopia where for self­regulation, while Coinbase argues
who until January was the acting Comp­ blockchains remove the need for financial for a new industry watchdog. Another
troller of the Currency; and Chris Giancar­ intermediaries and regulators, took little route for influence comes from firms club­
lo, head of the cftc between 2017 and 2019. notice of officials. But that has changed as bing together through trade associations.
In Britain, Philip Hammond, a former the pressure has ratcheted up. Binance, a Perianne Boring, who runs the Chamber of
chancellor of the exchequer, joined Cop­ large crypto­exchange, came under scruti­ Digital Commerce, a group in America that
per, a crypto startup, in October. ny in the summer, with regulators in Brit­ is largely made up of crypto firms, says her
A recent wobble notwithstanding, the ain, Germany and Japan warning that it work ranges from advocating for bitcoin
market value of crypto assets has risen 12­ was conducting certain operations in their exchange­traded funds to rebutting argu­
fold since early 2020, to $2.4trn. Some jurisdictions without the appropriate au­ ments linking cryptocurrencies to ran­
places, like El Salvador, have sought to ride thorisation. Another wake­up call came somware. “We’re seeing much higher­level
the wave, embracing crypto to gain celebri­ from America in August, when a clause officials engaging with us,” she says.
ty. Others, such as China and India, have that required many crypto firms to report The industry has gained political capi­
threatened to ban it. Watchdogs in Ameri­ transactions to the taxman was tucked into tal, too. In America, the congressional
ca and Europe, the home to much crypto­ President Joe Biden’s infrastructure bill. Blockchain Caucus counts 35 lawmakers as
trading activity, by contrast, are only just The industry began a counter­offensive. members. Cynthia Lummis, a senator from
beginning to sniff around digital assets. One prong of it has been to lure govern­ Wyoming, has received a big chunk of her
And that in turn is prompting crypto firms ment officials and compliance experts 2026 campaign contributions from indi­
to try to steer, if not head off altogether, the from banks with big pay packets. Deepali viduals linked to crypto firms. Last month
coming wave of regulation. “All of a sud­ she said she opposed Jerome Powell’s reap­
den”, says Loni Mahanta of the Brookings pointment as head of the Federal Reserve
Institution, a think­tank in Washington, because of the central bank’s “political ap­
lobbying “is on a rocket ship.” proach to digital assets”. In October 2020
Reams of regulations are potentially in the Chamber of Digital Commerce’s politi­
play. One set involves stopping crypto as­ cal­action committee gave $50 worth of
sets from being used to launder money. In bitcoin to every member of Congress.
October the Financial Action Task Force, an With watchdogs on the alert, crypto­
intergovernmental body which sets global capitalists’ visions for regulation are un­
standards, recommended new rules for likely to materialise in their entirety. But
crypto­services providers, including those the risk is that they lead to puny rules. In
regarding the user data they must collect. August the passage of the infrastructure
Countries are implementing these, but at bill was delayed by a week after a biparti­
varying speeds. A second area, overseen by san group of lawmakers objected to the
lawmakers, concerns the taxation of cryp­ crypto provision. The legislation, includ­
to investments. Some countries treat them ing the provision, was eventually enacted
like property, with levies on capital gains in November. But a new bill is now trying
due only when assets are sold. Others re­ to weaken the crypto clause. The rewards
gard them as akin to foreign exchange, for walking through the revolving doors
meaning unrealised gains are also taxed. are only going up. n

012
 The Economist December 11th 2021 Finance & economics 71

Free exchange Family matters

Why the demographic transition is speeding up

Demographic transitions today follow fairly similar patterns,
reckon Matthew Delventhal of Claremont McKenna College, Jesús
Fernández­Villaverde of the University of Pennsylvania and Nezih
Guner of the Universitat Autònoma de Barcelona, in another new
paper. The authors gather data on 186 countries, and find that all
but 11 have experienced the transition to lower, more stable death
rates that are well below pre­industrial norms. A bevy of about 70
countries began their transition towards low fertility rates be­
tween 1960 and 1990. Only one country—Chad—has yet to begin a
fertility transition. (In 80 countries, both mortality and fertility
shifts towards modern lows are now complete.)
Importantly, the pace at which countries undergo a demo­
graphic transition seems to have sped up. While Britain’s transi­
tion unfolded in a leisurely fashion between the 1790s and the
1950s, Chile’s occurred more briskly between the 1920s and the
1970s, and those begun towards the end of the 20th century have
taken only a few decades. This acceleration seems at least partly to
reflect what the authors call “demographic contagion”, or the fact
that transitions occur sooner and faster where geographically and
culturally proximate places have already undergone a fertility
shift. This proximity effect may also mean transitions now start at
lower income levels. Whereas fertility transitions over the past

A s birth announcements go, it was momentous. On Novem­

ber 24th India’s government declared that the country’s fertil­
ity rate had dropped to 2.0 children per woman. That is below the
two centuries tended to begin at gdp per person of about $2,700
(on a purchasing­power­parity basis and in 2011 prices), those be­
gun since 1990 occurred at an income level of around $1,500.
replacement rate—at which new births are sufficient to maintain a The upshot of this rush into the demographic transition is a
steady population—and puts India in the company of many richer steady drop in global fertility and population growth. The world’s
economies. Indeed, fertility rates are now below replacement lev­ fertility rate, which stood at 3.5 births per woman in the
el in all four “bric” countries (Brazil, Russia, India and China), mid­1980s, fell to just 2.4 in 2019. Indeed it is possible, given ob­
with the population probably falling in Russia and China. It is no served declines in rich­world births during the pandemic, that co­
surprise that emerging economies should follow a demographic vid­19 may have pushed the world as a whole within sight of a re­
trajectory similar to that travelled by rich economies before them. placement­level fertility rate, if only temporarily. The world’s pop­
But the pace of change seems to be accelerating, with potentially ulation will continue to grow even after that level is attained, be­
profound implications for the global economy. cause of the large number of people either at or approaching
What social scientists refer to as the “demographic transition” child­rearing age. India’s population, for example, is still expected
has long been an essential feature of economic modernisation. In to rise to about 1.6bn by mid­century. But that is a lower peak (by
pre­industrial societies both birth and death rates (annual births about 100m people) reached sooner (by about a decade) than pre­
and deaths per 1,000 people) were very high, and overall popula­ viously expected. Similarly, the rapid decline in global fertility
tion growth was uneven and slow. But in the 18th century, death may mean that projections by the un, which show the global pop­
rates in parts of north­west Europe began to decline, marking the ulation rising towards 11bn by 2100, will ultimately have to be re­
first stage of a seismic demographic shift. Falling death rates led to vised downwards.
rapid population growth; Britain’s population roughly doubled
between 1760 and 1830. Yet from the late 18th century, fertility rates Old money
began to decline as well. By the 20th century, birth and death rates The global completion of the demographic transition will not be
in rich countries stabilised at low levels, leading to slow or even without its headaches. It may complicate long­run macroeco­
negative population growth in the absence of immigration. nomic problems, for example, or so suggests recent work by
Transitions are complex social phenomena. Falling death rates Adrien Auclert and Frédéric Martenet of Stanford University,
are easiest to explain, as the product of improved nutrition, medi­ Hannes Malmberg of the University of Minnesota and Matthew
cine and public health. Falling birth rates are in part a response to Rognlie of Northwestern University. They note that increased sav­
economic incentives. As the return to skill increases, for example, ing by ageing populations depresses inflation and interest rates.
families seem to have fewer children in order to invest more in As the share of world population over 50 rises from 25% today to
each child’s education. But culture matters, too. In a recent paper, 40% in 2100, low interest rates may become more entrenched, re­
Enrico Spolaore of Tufts University and Romain Wacziarg of the turns on assets could drop and global imbalances widen.
University of California, Los Angeles, note that in Europe, new fer­ Yet demographic transitions could also bring a range of eco­
tility norms first emerged in France in the late 18th and early 19th nomic benefits. Slower population growth could make the chal­
century. The fashion for fewer births was probably rooted both in lenge of cutting carbon emissions less daunting. And the poten­
changes in outlook associated with secularism and the Enlighten­ tial of the fewer workers around might be better realised, through
ment and in the spread of information about family planning. As better education and more women participating in the labour
birth rates fell across Europe, they did so faster and earlier in plac­ force. The arrival of immigrants, once viewed as a threat, could
es with linguistic and cultural ties to France. even become as momentous an occasion as a birth in the family. n

012
 72
Science & technology The Economist December 11th 2021

Animal research semble Homo sapiens. But working on hu-

man beings’ closest relatives—apes and
New Model Army monkeys—is increasingly hard to do. First,
such large animals are expensive to keep.
Second, that expense means they are often
unavailable in the numbers needed for sta-
tistically significant work. Third, public
opinion, at least in the West, is swinging
RANO MAFANA
against their use.
Might lemurs be better than mice when it comes to medical research?
Mice, one common alternative to pri-

T ree 2b, ranomafana, is not an address

recognised by Madagascar’s postal ser-
vice. It is, though, someone’s home. The
Judah, and his 348 predecessors simi-
larly trapped and released by biologists at
ValBio, are among the first recruits to what
mates, are cheap, abundant and less prone
to stir consciences. But they can only take
you so far. Though mammals, they are not
someone in question is a mouse lemur is, on the face of it, an extraordinarily am- close relatives of people. Sometimes that
called Judah, the 349th participant to be bitious undertaking. For Dr Krasnow’s plan lack of relatedness can be finessed by in-
enrolled into a project run by Mark Kras- is to add mouse lemurs to the short and serting human genes that are relevant to
now, a biochemist at Stanford University, rather random list of so-called model or- the matter under investigation. But even
in California. ganisms. These are species which, for va- then, the underlying platform is still a ro-
Judah’s involuntary membership of the rious reasons, biologists know a lot about. dent, not a primate. By contrast, a mouse
project began when he found himself And, since knowledge breeds knowledge, lemur, though it looks and behaves a bit
trapped inside a metal box. He had been they tend to be the ones about which fur- like a mouse, and is not much bigger, is in-
lured there by a bait of banana put there by ther knowledge accumulates. deed a primate, and so is much more simi-
Dr Krasnow’s collaborators, Haja Ravelon- lar to a human being than a rodent is.
janahary and Mahery Razafindrakoto of The recruiting sergeant calls Mice, moreover, have short lives, and
the ValBio research centre on the edge of Model organisms assist all sorts of biologi- thus high turnover. But mouse lemurs can
Ranomafana National Park, 260km south cal research, but a lot of it is medical. And live for 14 years in captivity and maybe ten
of Antananarivo. Judah’s captivity was here there is a problem. Ideally, medical re- in the wild. That is a nice compromise be-
temporary, for he was released back into search would be done on species that re- tween a period brief enough to arrive at
his home at 2b about six hours later. But in conclusions that are useful (and will result
the interim he was subjected to various in- in career-enhancing research papers), and
dignities. He had his testes measured, a → Also in this section long enough to be more similar to a human
blood sample taken and he was made to do being’s life-history. Yet, like mice, mouse
74 High-tech chickpeas
exercises to see how strong he was. He also lemurs breed prolifically and quickly, with
had a tiny transponder inserted under his 74 Liquid-metal machines a gestation period of just two months and
skin so that he could be identified next maturity achieved within six to eight
75 Bull running and urban design
time he was caught. months. And not just in a laboratory. In

012
 The Economist December 11th 2021 Science & technology 73

Madagascar there are millions of them— Patricia Wright, a primatologist at the State Stanford colleague Stephen Quake have
for, contrary to common perception, not University of New York, Stony Brook, who built a near­complete atlas of lemur cell
all lemur species are endangered. helped encourage the Malagasy govern­ types—about 750 in all. This permits a
What is particularly intriguing for Dr ment to found Ranomafana, and who has whole new level of investigation. For ex­
Krasnow and his colleagues, though, is been working there for decades. And that ample, they were able to identify a meta­
that, in captivity at least, mouse lemurs led to the lemur­trapping project now static cell in the lung of an animal that had
suffer several illnesses which affect hu­ joined by Judah. One early discovery from had to be put down because it had cancer,
mans too. These include Alzheimer’s and the genetic analyses made possible by this as deriving from that animal’s uterus.
other neurodegenerative disorders, cardi­ project (admittedly, one that is not of
ac arrhythmias, metastatic uterine cancer, much obvious medical use) is that what Taking the shilling
strokes and atherosclerosis, the furring of appeared to be one species of brown It could all fall flat on its face, of course. For
the arteries that can lead to a heart attack. mouse lemur, the species Dr Krasnow and one thing, the field data may shed no light
Model organisms tend to happen by ac­ Dr Wright thought they were investigating, on disease­relevant biology after all. Most
cident. Yeast is used by brewers and bak­ is actually two. They live in the same range of the illnesses that Dr Krasnow is interest­
ers, so is an obvious topic for study. Fruit and are indistinguishable to the human ed in manifest themselves in later life. In
flies were picked by Thomas Morgan, an eye. But they can clearly tell each other humans, such diseases are associated with
early geneticist, because they are easy to apart because their genetics show that they behaviours which evolution did not fore­
breed in large numbers—and it helped that diverged several million years ago, and do see, such as consuming processed food or
some of their cells have giant chromo­ not interbreed. sitting at a desk all day. Since being locked
somes which showed up well under the Dr Krasnow does, however, have high up in a cage and fed a reliable supply of
microscopes of the day. And mice were hopes of the medical side. In particular, as food is equally unnatural, that may also be
kept as pets by fanciers long before one they age, mouse lemurs in captivity some­ true for lemurs. It is therefore by no means
saw the inside of a laboratory cage. times develop the plaques and tangles of clear that looking at wild lemurs will add
Dr Krasnow’s plan to add mouse lemurs abnormal protein seen in human Alzheim­ anything. Moreover, illnesses like Alz­
to the list was slightly less accidental than er’s patients. At the same time, they devel­ heimer’s are not exactly life­elongating. In
these. It began in 2009, when he charged op behavioural abnormalities, such as for­ the wild, any individual manifesting them
his daughter Maya, then still at school, and getfulness. Nothing similar happens natu­ would probably get short shrift from natu­
two of her friends to come up with a new rally in mice. Nor do mice develop the sorts ral selection. Indeed, there is a whole body
model organism for studying primates as a of heart arrhythmias seen in people. But of theory which suggests the very reason
summer project in his laboratory. After re­ mouse lemurs do. In fact, he and his col­ they manifest only in old age is because, in
viewing the gamut of the primate order, leagues have now identified nine types of a state of nature, a human being would
which contains about 500 species, and also arrhythmia in their lemurs, each of which probably have died or been killed before
looking at a few outliers such as tree corresponds to one found in people. they had had a chance to appear.
shrews, Krasnow junior and her two com­ Though the animals will not be subject­ There is also the political side of things.
padres settled on mouse lemurs. Not only ed to invasive sampling while alive, the Though researchers on other species are
are these abundant and fast­breeding, they ability to identify them individually in the unlikely to be hostile in principle to mouse
also do well in captivity, as a 60­year­old wild means that their behaviour can be lemurs joining the model­animal­research
colony of them in France testifies. studied, to see if it changes as they age in party, whether they will co­operate with
Not one to ignore his daughter’s advice, ways similar to ageing in people. What else the group of newcomers in the far corner
Dr Krasnow investigated in more detail. In might be discovered from this behavioural who are talking animatedly about the crit­
2011, he organised a workshop of lemur bi­ work remains to be seen, for this is an old­ ters remains to be seen. Model animals do,
ologists at the Howard Hughes Medical In­ fashioned experiment of the sort that is however, require a consensus that that is
stitute, in Virginia, to kick the idea around. not testing a specific hypothesis but, rath­ what they are—and this consensus is best
It found favour, and in particular it acceler­ er, searching for leads to pursue. built by lots of people studying lots of dif­
ated the completion of a genome­sequenc­ Meanwhile, back in the lab, and thanks ferent aspects of them. So if not enough
ing project for the animals—a sine qua non to a technique called single­cell rna ex­ people join the mouse­lemur clique, the
for any self­respecting model organism. It pression profiling, Dr Krasnow and his project will be doomed.
also introduced Dr Krasnow to the idea that Another potential threat is that, al­
fieldwork might be an important part of though mouse lemurs do not truly share
his proposal. the mini­me human lookalikeness of
That, in some ways, is the most intrigu­ monkeys and apes, they are still pretty
ing idea of the lot. Most biologists working cute. Those opposed to animal experi­
with model organisms make a fetish of ments of any sort—even the carefully non­
control. Mice, in particular, are often bred invasive work being done by Dr Krasnow
deliberately to be as genetically similar to and Dr Wright—could probably make
one another as possible, within a given something of that. And the very similarity
line. Dr Krasnow has the opposite plan. Ge­ of physiology to humans that makes the le­
netic analysis is now so cheap that every murs an attractive subject of study might
animal involved in a project can be se­ also be used to argue that they should not
quenced. Made visible in this way, diversi­ be used in research.
ty is as much an opportunity as a problem, Still, it is a bold idea, and certainly
for that information can be correlated not worth pursuing. Perhaps the cross­fertili­
only with obvious, medically relevant sation of laboratory and field studies in
stuff, such as disease manifestation, but this way will, indeed, turn out to be the
also with behaviour—and behaviour ex­ wave of the future. In army terms, mouse
pressed in the wild, not just in the restrict­ lemurs are now at boot camp, undergoing
ed environment of a laboratory. basic training. Whether they will pass
That insight led to collaboration with Pressing the paws button muster remains to be seen. n

012
 74 Science & technology The Economist December 11th 2021

Plant breeding data about the characteristics of the plants genes are involved means the process of
they were taken from, known in the argot breeding in those improvements can be
Chick-please as their phenotype. That allowed the team done quickly. Instead of waiting for a plant
to cross­correlate between genotype and to grow and mature, you can check its
phenotype, identifying which bits of the genes shortly after it has germinated, and
former appeared responsible for what throw it away if you do not want it.
parts of the latter. As a consequence, they Upgrades suitably developed, the ques­
think they have identified 24 haplotypes tion will be how to get them into the wider
A neglected crop is about to get a
that do useful things like increasing seed world. Dr Varshney says that big agricul­
high-tech makeover
weight, improving yield per plant and re­ tural and seed companies tend to have lim­

P liny the elder, a Roman administra­

tor with a sideline in philosophy, appre­
ciated the complexities of the chickpea. In
ducing the time it takes for a plant to be­
come mature enough to flower.
Looking back at the original collec­
ited interest in chickpeas. That means
more reliance on smaller firms and co­op­
eratives for distribution. If this can be
his master work, “Naturalis Historia”, he tions, they found around 80% of cultivars done, though, the humble chickpea will
wrote of it: “This plant presents consider­ lacked these beneficial blocks of genes, join the big boys like rice and soyabeans as
able differences in reference to size, col­ suggesting there was considerable room crops whose genes have been analysed for
our, form and taste.” One type, he reported, for improvement. Knowing exactly which the betterment of human nutrition. n
came in the shape of a ram’s head. Another,
the Venus pea, was white, round and
smooth. A third had small, angular seeds.
These days, chickpeas are still as varied,
though the main types now recognised are
the large, light­coloured Kabuli and the
smaller, darker Desi. They are grown in
more than 50 countries, particularly in
Asia and Africa, and contribute 11.5m
tonnes of protein­rich pulses to the world’s
food supply, making them the third most
productive leguminous food crop, after
beans and peas. But their variety is under­
exploited, and much of it is found in poorly
studied “landraces”—local varieties that
have some genetic coherence but are not as
selectively bred as modern cultivars.
Recognising this, a group of researchers
from the International Crops Research In­
stitute for the Semi­Arid Tropics (icrisat)
and 40 other organisations, led by Rajeev
Varshney of Murdoch University, in Aus­
tralia, have produced a comprehensive Mechanical engineering
“pan­genome” derived from the cultivated
plant, Cicer arietinum, and seven of its wild Liquid engineering
relatives, which they have now published
in Nature. One of their purposes was to
identify blocks of genes, called haplotypes,
that encode particular, desirable proper­
ties, and which could be bolted together in
various combinations to yield both better
Blobs of molten metal could replace all sorts of machinery and moving parts
chickpeas overall, and chickpeas better
suited to particular sets of circumstances.
In a world where circumstances are chang­
ing rapidly, that matters. A study published
G ears abrade, pistons crack, pumps
clog. If engineers had their way, ma­
chines would have no moving parts at all.
In a recent paper published in Matter,
Kourosh Kalantar­Zadeh at the University
of New South Wales used these properties
in 2016, for example, estimated that shifts Alas, a sedentary lump of metal would be a to design a machine with a single moving
in temperature and rainfall patterns could, paperweight, rather than a useful mach­ part: a continuous­flow reactor. As the
by 2069, decrease chickpea yield in parts of ine. So, perhaps just one moving compo­ name suggests, these are devices for per­
the world by almost 20%. nent would be an acceptable compromise. forming chemical reactions under sus­
Building on an initial map of more than Such machines are now beginning to tained pumping, which offers more preci­
28,000 chickpea genes, published by icri- appear. The component in question is a sion than mixing chemicals in vats. The
sat in 2013, Dr Varshney’s team sequenced cleverly chosen liquid, any one of a num­ mechanical pumps that power them, how­
3,171 cultivated chickpeas and 195 wild ex­ ber of alloys of gallium that melt below ever, are frequently fouled.
amples taken from collections around the room temperature. These have three allur­ Dr Kalantar­Zadeh designed and 3d­
world. That added 1,582 previously un­ ing properties: the highest surface ten­ printed a circular track, 14cm in circumfer­
known genes to the list, including ones sions of any known liquid (nearly ten ence, for reactants to flow around. It was
that encode responses to environmental times that of water), good electrical con­ interrupted by a single cavity containing a
factors such as cold, acidity and oxidative ductivity, and extreme chemical reactivity, droplet of liquid metal hooked up to an
stress. The result is the most comprehen­ in the form of a willingness to donate elec­ electrical power source. A voltage applied
sive genetic map of any vegetable species. trons—a process known as oxidation—to to the droplet produces a gradient in its
Crucially, the samples came with useful nearby compounds. surface tension. That, in turn, leads to a

012
 The Economist December 11th 2021 Science & technology 75

pressure difference across the metal’s sur­

face strong enough to pull reactants Crowd behaviour
across, allowing electron donation to hap­
pen and the desired chemical reaction to
Of architects and bull-running
occur. The deformation of the droplet as it
tenses and relaxes within its cavity pumps
A Spanish tradition offers insight into how crowds behave
the resultant chemical away, allowing
fresh reactants to flow in and the process to
begin again. The researchers successfully
applied this model to three different reac­
E very year thousands of people con­
verge on the city of Pamplona, in
north­eastern Spain, for the opportunity
to calculate the velocities of the runners,
the density of the crowd and the prob­
ability of a runner tripping and falling.
tions, including the reduction of flakes of to run for their lives as six fighting bulls They also examined the trajectories of
graphene oxide, which is useful for purify­ are released to charge through the town. the bulls, the responses of individual
ing water and in energy storage. There are dozens of injuries every year, runners as bulls came near to them, and
And this is only the latest in a growing and there have been at least 15 deaths the relationship between runner­group
body of experiments and prototyping recorded since 1910. But the event is of density and velocity.
aimed at exploiting the unique properties interest to more than just adrenaline Perhaps unsurprisingly, the research­
of liquid metals. In 2014, Dr Kalantar­Za­ junkies and animal­rights activists. A ers found that runners picked up speed
deh’s group developed a pump capable of paper just published in Proceedings of the when the bulls drew near. Less expected
driving liquids around a circuit by similar National Academy of Sciences describes was the finding that the speed of individ­
means, but which did not exploit the met­ the insight the event offers into the ual runners increased with the density of
al’s reactivity. In 2016, miniature robots psychology of panicked crowds. the crowd. At the crowd’s maximum
were fitted with liquid metal wheels that That is a useful topic to explore. Ar­ speed of around four metres per second,
could be steered across an aqueous sol­ chitects, civil engineers and urban plan­ density reached roughly one pedestrian
ution by manipulating their surface ten­ ners must try to work out how people per square metre. This finding is at odds
sion. In 2018, wheels containing droplets will behave in the event of a disaster like with a long­held assumption in architec­
of liquid metal were developed that a fire, a flood or a terrorist attack so they tural and urban­design circles that peo­
changed their centres of gravity in the can design their creations to avoid po­ ple will slow their pace as group density
presence of electric fields, thereby causing tentially lethal crushes. Unfortunately, goes up, in order to lower the risk of a
the wheels to rotate. In 2021, another group solid information is hard to come by. collision, which could lead to a fall and,
of researchers devised a liquid metal­po­ Ethics­review boards, after all, are likely perhaps, injury or death as a runner is
wered motor that suffered far less wear and to frown on researchers putting volun­ trampled by others. Dr Parisi’s data sug­
tear than those built from solid parts. teers into deadly danger simply to study gests that groups of fast, crowded run­
The laws of physics dictate just where how they might behave. But Daniel Par­ ners are indeed at risk: of 20 people who
such liquid­metal machines will be most isi, a physicist and computer scientist at fell, all did so within a fast­moving,
effective. The forces produced by surface the Technical Institute of Buenos Aires, dense group. Most (14 of the 20) involved
tension dominate at small scales. At larger and the paper’s lead author, realised that two or more people, with one person
scales they are eclipsed by those generated the Pamplona bull­runs offered the tripping another.
by electromagnetism, on which conven­ perfect natural experiment. Yet it seems that, in the heat of the
tional motors rely. This means that liquid­ Dr Parisi and his team went to two moment, people pay little heed to the
metal engineering will be most useful for different rooftop locations in Pamplona danger of colliding with each other, and
objects that are roughly centimetre­size in July 2019, and recorded footage of the do not slow down. The onus therefore
and below. As this is the regime where runners as the animals were released. A falls upon urban designers to work out
maintenance and repairs are the most fid­ wave of people running at top speed how best to plan the construction of
dly and costly, such a feature is good news. raced past their cameras a few seconds future alleys, tunnels, bridges and other
Researchers are exploring their use in ahead of the bulls. The researchers passages that restrict flow. The only
“labs­on­a­chip”, which are portable de­ brought their recordings back to the lab option may well be to make them wider.
vices for conducting a variety of scientific
tests in the field, far from conventional
laboratory infrastructure. Some scientists
have crafted them into modular antennas,
whose resonant frequencies can be
changed by adjusting their shape. Others
hope to weave them into soft robots, where
they could act as artificial muscles, or to
use them in 3d­printed electronics.
And even though they will likely be lim­
ited to smaller devices, the appeal of liquid
metals is easy to see. Blobs of liquid experi­
ence none of the friction­induced wear­
and­tear that eventually causes gearboxes,
valves and the like to break down. Any
damage or disruption they suffer is natu­
rally self­healing. Gallium alloys, more­
over, are easy to make, harmless to the
touch, and have very low rates of evapora­
tion, meaning that users are unlikely to in­
hale them accidentally. Just the ticket, in What you don’t want to happen
other words, for creative engineers. n

012
 76
Books & arts The Economist December 11th 2021

The best books of 2021 Red Roulette. By Desmond Shum.

Scribner; 320 pages; $30 and £20
Read all over An extraordinary behind­the­scenes
glimpse of the nexus of business and
politics in China from a former insider,
combining explosive revelations with
grubby details of elite life. The well­born
are shielded from the worst effects of
Our books of the year are about God, opioids, China and cannibalism
anti­corruption probes, the author char­
Invisible China. By Scott Rozelle and ges: “Red aristocrats got a prison sentence;
Politics and current affairs Natalie Hell. University of Chicago Press; commoners got a bullet in the head.”
248 pages; $27.50 and £22
The biggest obstacle to China’s devel­ How the Word is Passed. By Clint Smith.
Empire of Pain. By Patrick Radden Keefe. opment is that rural children—two­thirds Little, Brown; 352 pages; $29.
Doubleday; 560 pages; $32.50. Picador; £20 of the total—do terribly in school, argues Dialogue Books; £20
This is the tragic, enraging story of the this stunningly researched book. Many are By blending journalistic inquiry with
Sackler family, the previously low­profile malnourished, lack reading glasses or historical insights and poetic descrip­
owners of Purdue Pharma—which in 1996 suffer from energy­sapping intestinal tions, the author turns a complex and
introduced the drug OxyContin. The au­ worms. If these basic problems are not traumatic subject—racism and the legacy
thor shows how an epidemic of prescrip­ fixed, say the authors, China will struggle of slavery in America—into a beautiful,
tion­opioid abuse morphed into a worse to reach its goal of broad prosperity. insightful and even enjoyable journey.
one of illicit heroin and, later, fentanyl.
The Sex Lives of African Women. By We Are Bellingcat. By Eliot
Do Not Disturb. By Michela Wrong. Public Nana Darkoa Sekyiamah. Dialogue Books; Higgins. Bloomsbury Publishing;
Affairs; 512 pages; $32. Fourth Estate; £20 304 pages; £18.99. To be published in 221 pages; $28 and £20
A devastating exposé of a remarkable America by Astra House in March; $28 How did a bunch of self­taught internet
leader, President Paul Kagame of Rwanda. A Ghanaian feminist and activist relays sleuths help solve some of the biggest
He won global praise for ending the geno­ stories of sexual freedom and relation­ crimes of recent years, such as the down­
cide of Tutsis in 1994 and promoting ships. Mostly told pseudonymously, they ing of flight mh17 over Ukraine and the
development. But his regime has ruled are touching, joyful, defiant—and honest. Salisbury poisonings? Bellingcat’s founder
through fear, invaded its neighbours and chronicles some of the outfit’s investiga­
assassinated opponents even after they tions, and its efforts to galvanise citizen
fled abroad. The author, a former admirer, → Also in this section journalists, expose war crimes and pick
spent years gathering evidence for this apart disinformation. An antidote to
79 Books by our writers
terrifying account. cyber­miserabilism.

012
 The Economist December 11th 2021 Books & arts 77

biography of the 18th­century British All In. By Billie Jean King. Knopf; 496
History potter. To boost productivity, he aimed to pages; $30. Viking; £20
make machines of men—and he did. True to its title, this autobiography is
bracingly candid. The author describes her
The Gun, the Ship and the Pen. There is Nothing for You Here. By Fiona battles on the tennis court—she won six
By Linda Colley. Liveright; 512 pages; $35. Hill. Mariner Books; 432 pages; $30 Wimbledon singles championships and 14
Profile Books; £25 An account of how the daughter of an in doubles in one of the 20th century’s
A wide­ranging account of the forces that English miner rose to become the top great sporting careers—as well as her
propelled the writing of constitutions— adviser on European and Russian affairs struggles with sexism and prejudice.
documents that have defined the modern in Donald Trump’s National Security
world—from the 18th century until today. Council. She draws perceptive compari­
The trend was driven by the evolving sons between the post­industrial blight of Culture and ideas
nature of war and turbocharged by high­ her childhood and disadvantaged parts of
speed printing presses. An illuminating Russia and America—and between the
and original global history. Kremlin’s evisceration of democracy and God: An Anatomy. By Francesca
the dangers it faces in America. Stavrakopoulou. Picador; 608 pages; £25.
Tunnel 29. By Helena Merriman. To be published in America by Knopf in
PublicAffairs; 352 pages; $28. All the Frequent Troubles of Our Days. January; $35
Hodder & Stoughton; £20 By Rebecca Donner. Little, Brown; 576 A theologian presents the Judaeo­Chris­
Using a narrow, 120­metre tunnel beneath pages; $32. Canongate; £16.99 tian God as few will have seen him before.
the wall that had recently divided their A feat of historical excavation that tells the Placing him in the context of other divin­
city, 29 East Berliners escaped to freedom inspiring story of the author’s great­aunt, ities of south­west Asia, she conducts a
in September 1962. A captivating retelling Mildred Harnack. A quiet English profes­ learned but rollicking journey through
of one of the most astonishing episodes in sor from Wisconsin, Harnack wound up every aspect of Yahweh’s body. A book that
East Germany’s grim history. leading one of the most important resis­ will offend some but delight many more.
tance cells in second­world­war Berlin—
Cuba: An American History. By Ada before she was betrayed and executed. The Sinner and the Saint. By Kevin
Ferrer. Scribner; 576 pages; $32 Birmingham. Penguin Press; 432 pages;
The idea of putting the United States at the The Last King of America. By Andrew $30. Allen Lane; £25
centre of Cuba’s history is not surprising, Roberts. Viking; 784 pages; $40. Published Like Fyodor Dostoyevsky, Pierre­François
but this fascinating book shows just how in Britain as “George III: The Life and Reign Lacenaire had literary aspirations, served
intertwined the two countries have been. of Britain’s Most Misunderstood Monarch”; in the army and gambled rashly. Both
America was domineering from the start, Allen Lane; £35 flirted with radical politics; both went to
but today has a chance to prove itself to be A stout Tory defence of a much misun­ prison. Dostoyevsky eventually wrote
a friend to the island’s progress. derstood king, based heavily on unpub­ “Crime and Punishment”—based in part
lished correspondence. Far from being a on murders committed by Lacenaire in
The Greek Revolution. By Mark Mazower. crazed tyrant who deservedly lost the 1834. This book situates their connection
Penguin Press; 608 pages; $35. American colonies, George, it argues, was in the stew of mid­19th­century ideology.
Allen Lane; £30 an honourable, rule­abiding stickler for
An elegant and rigorous account of the protocol, who worked hard to support and Fallen Idols. By Alex von Tunzelmann.
Greek uprising against Ottoman rule 200 even strengthen Britain’s parliamentary Harper; 320 pages; $26.99. Headline; £20
years ago—events, it argues, which helped democracy and to promote its interests. Ranging from George III to Saddam Hus­
shape modern Europe. The episode also sein, India to the Dominican Republic,
holds lessons on the galvanising effects of this account of the fates of controversial
violence, the role of foreign intervention statues—variously dumped, destroyed,
and the design flaws in dreams. moved and re­erected—offers insights
into the times and places they were put up
and taken down. Statues simplify history,
Biography and memoir the author says; what is really educational
are the arguments they provoke.

Fall. By John Preston. HarperCollins; 352 Barça. By Simon Kuper. Short Books;
pages; $28.99. Viking; £18.99 352 pages; £20
The story of Robert Maxwell, a monstrous, This look at how modern football mega­
enigmatic, bullying, narcissistic crook of clubs are run (and misrun), by a columnist
gigantic appetites—who at his peak was for the Financial Times and lifelong fan of
one of the world’s most recognisable Barcelona, may be one of the most foren­
businessmen—may be largely unknown sic books about the football industry ever
to anyone under 40. This book tells it with written. Thoughtful and dramatic.
great verve and the benefit of extensive
interviews with, among others, Maxwell’s The Twelve Lives of Alfred Hitchcock.
one­time rival Rupert Murdoch. By Edward White. W.W. Norton; 400 pages;
$28.95 and £22.99
The Radical Potter. By Tristram Hunt. A bracing and original study of the master
Metropolitan Books; 352 pages; $29.99. of suspense. It covers his mistreatment of
Allen Lane; £25 female stars and admiration of Cary Grant:
Josiah Wedgwood wanted to “astonish the “an avatar for an inner Hitchcock that
world”. He succeeded, says this delightful could not be outwardly expressed”.

012
 78 Books & arts The Economist December 11th 2021

Fiction

Mother for Dinner. By Shalom Auslander.

Riverhead Books; 272 pages; $28.
Picador; £16.99
In this laugh­out­loud, gravely serious
satire on identity politics, a mother’s
deathbed presents a solemn decision:
whether or not to eat her. The family are
Cannibal­Americans, the most reviled
minority in a place where “everyone else
was retreating to their cages and calling it
freedom”. What, the novel asks uproar­
iously, do individuals owe history?

The Books of Jacob. By Olga Tokarczuk.

Translated by Jennifer Croft. Fitzcarraldo
Editions; 928 pages; £20. To be published in
America by Riverhead Books in February; $35
The tome that secured its author the Nobel
prize of 2018 encompasses a “fantastic
journey across seven borders, five lan­
guages and three major religions, not
counting the minor sects”. At the centre of with apartheid’s end. The Booker­winning American justice) became global power­
this epic of faith, ideas and the Enlighten­ novel is also a meditation on a house and players as intermediaries between re­
ment is a real­life 18th­century mystic. inheritance in the tradition of “Brideshead source­rich autocrats and their customers.
Revisited” and “Howards End”.
The Plot. By Jean Hanff Korelitz. Celadon Career and Family. By Claudia Goldin.
Books; 317 pages; $28. Faber; £8.99 Detransition, Baby. By Torrey Peters. One Princeton University Press; 344 pages;
There are too many novels about writers, World; 352 pages; $27. Serpent’s Tail; £14.99 $27.95 and £22
but this is one to read. A down­on­his­ Three characters—a trans woman, a cis An economist documents the typical life
luck author steals a slam­dunk plot from a woman and a man who has recently de­ experiences of five generations of Amer­
creepy student. The result is wealth, transitioned after a short period living as a ican college­educated women as they
fame—and spiralling disaster. At once a woman—decide to bring up a child togeth­ trade off work and family. Today’s gender
close­to­the­bone satire on publishing, an er. What follows is an intense and fraught pay gap, she argues, is mainly the result of
inquiry into the ethics of storytelling and exploration of identity and what it means couples making a rational choice over how
a propulsive upmarket thriller. to be a woman and a parent, bound up in a to maximise household income—by giv­
moreish, at times hilarious narrative. ing precedence to one high­paying career.
Great Circle. By Maggie Shipstead. Knopf; Provocative and compelling.
608 pages; $28.95. Doubleday; £16.99 Chronicles from the Land of the
A sweeping saga that alternates between Happiest People on Earth. By Wole The Future of Money. By Eswar Prasad.
the life of a tenacious female aviator in the Soyinka. Pantheon; 464 pages; $28. Belknap Press; 496 pages; $35 and £28.95
1930s and that of a millennial film star cast Bloomsbury Circus; £20 The digitalisation of finance has huge
to play her in a biopic. In death, “each of us The first work of fiction by the Nobel­ implications—and as it loses physical
destroys the world,” the author observes— prizewinning playwright for 50 years is form, money’s meaning will become
but her engrossing novel is a moving both a sophisticated thriller and a de­ ever­harder to grasp. This nuanced book
reflection on the will to survive. nunciation of Nigeria’s political class. The explores the effects of the upheaval.
narrator is a doctor who finds that a trade
Klara and the Sun. By Kazuo Ishiguro. in human body parts is being run from his The Power of Creative Destruction. By
Knopf; 320 pages; $28. Faber; £20 hospital. “Something is broken,” a charac­ Philippe Aghion, Céline Antonin and
The author’s first novel since winning the ter laments. “Beyond race. Outside colour Simon Bunel. Translated by Jodie Cohen­
Nobel prize in 2017 is a coming­of­age or history. Something has cracked.” Tanugi. Belknap Press; 400 pages;
drama in which sophisticated androids $35 and £28.95
are bought by wealthy parents as company An application of Joseph Schumpeter’s
for their offspring. Alongside the futur­ Economics and business most powerful idea—which prizes in­
istic speculation, this is a satire on aspira­ novation as the driver of progress—to
tional parenting. Questions of faith and contemporary debates in economics. The
mortality mix with storylines involving The World for Sale. By Javier Blas and Jack result is sweeping, authoritative and, for
boy trouble and mother­daughter strife. Farchy. Oxford University Press; 416 pages; the times, strikingly upbeat.
$29.95. Random House Business; £20
The Promise. By Damon Galgut. The story of how a few commodity­trading The Story of Work. By Jan Lucassen. Yale
Europa Editions; 256 pages; $25. firms quietly reconfigured the world University Press; 544 pages; $30 and £25
Chatto & Windus; £16.99 economy, making fortunes, juggling em­ Beginning in the hunting­and­gathering
Four funerals mark the passage of time in bargoes and swaying geopolitics. Unscru­ past, this long view of work shows how
this profound tale of an unhappy white pulous operators such as Marc Rich (who little has changed over millennia. Pro­
South African family coming to terms spent two decades as a fugitive from gressing through the rise of cities, wages

012
 The Economist December 11th 2021 Books & arts 79

and markets for labour, it traces a perenni­

al cycle of injustice and resistance—and Staff books of 2021
the age­old desire for more.
Out­of­office politics
The Key Man. By Simon Clark and Will
Louch. Harper Business; 352 pages; $29.99.
Our writers considered technology, civil liberties, meritocracy and the trans debate
Penguin Business; £20
As head of the Abraaj Group, a private­ Athens: City of Wisdom. By Bruce Clark. nating account”, said Publishers Weekly,
equity firm that preached profit with Pegasus; 512 pages; $35. Head of Zeus; £25 which “issues an essential warning”.
purpose, Arif Naqvi became an investors’ A regular contributor on culture and
darling—then came unstuck. The gripping ideas documents the history of one of the Trans. By Helen Joyce. Oneworld; 320
tale of the alleged perpetrator of one of the world’s oldest continuously inhabited pages; $25.95 and £18.99
largest corporate frauds in history. places, from its legendary origins to the Our Britain editor analyses the sidelining
bustling modern conurbation where an of biological sex in favour of self­
ancient passion for politics and verbal declared “gender identity” in situations
Science and technology pyrotechnics remains undimmed. The from rape­crisis centres to sport. A “sear­
result is an “enchantingly readable ing and at times devastating analysis”,
history”, said the Literary Review. said the Sunday Times. The New York
A Shot to Save the World. By Gregory Times called it an “intelligent, thorough
Zuckerman. Portfolio; 384 pages; $30. Framers. By Kenneth Cukier, Viktor rejoinder to an idea that has swept across
Penguin Business; £20 Mayer­Schönberger and Francis de much of the liberal world”.
A journalist at the Wall Street Journal tells Véricourt. Dutton; 272 pages; $28.
the story of the great vaccine race of 2020. WH Allen; £20 Dohany Street. By Adam LeBor. Head of
A superb scientific drama of failure, deter­ Our By­Invitation editor and his co­ Zeus; 384 pages; £18.99
mination and triumph. authors explore what people can do that The third volume in a noir trilogy featur­
ai can’t: use mental models to see the ing Balthazar Kovacs, a detective in the
I, Warbot. By Kenneth Payne. Oxford world in a new way. ai depends on data, Budapest murder squad. An Israeli histo­
University Press; 336 pages; $29.95. but human cognition applies counter­ rian goes missing after investigating the
Hurst; £20 factuals to see what isn’t there. A plea for lost wealth of Hungarian Jews murdered
A thought­provoking reflection on how pluralism that is “different, and better, in the Holocaust. “A sure­footed piece”,
artificial intelligence will change conflict. than the usual recipes for smart think­ said the Financial Times, set in “an exu­
The offence will dominate, the author ing”, said the Financial Times. berantly realised Budapest”. By our for­
says. Martial virtues such as courage and mer Hungary correspondent.
leadership will yield to technical ones. We See It All. By Jon Fasman. Public
Affairs; 288 pages; $28. Scribe; £16.99 A Brief History of Motion. By Tom Stan­
Being You. By Anil Seth. Dutton Books; Our us digital editor examines the moral, dage. Bloomsbury; 272 pages; $28 and £20
352 pages; $28. Faber; £20 political and legal implications of sur­ One of our deputy editors considers the
Understanding consciousness is a “hard veillance technologies used by police, rise of the car, and the history and future
problem”, noted the philosopher David reporting from Ecuador, Israel, Sweden of urban transport, in a 5,500­year road­
Chalmers. Here a pioneering neuroscien­ and across America. He shows how trip that explodes myths and imagines
tist takes readers to the edge of what is surveillance affects everyone, and what roads not taken. “Great fun—and utterly
known, how scientists know it, and, most concerned citizens can do. An “illumi­ timely”, reckoned the Sunday Times.
importantly, how that knowledge could be “Standage writes with a masterly clarity,”
made useful in medicine and psychology. said the New York Times.

The Genetic Lottery. By Kathryn Paige Two Hundred Years of Muddling

Harden. Princeton University Press; Through. By Duncan Weldon.
312 pages; $29.95 and £25 Little, Brown; 339 pages; £20
Genes matter, says this study of their A former British­economy correspon­
relationship with life chances. But people dent reflects on 200 years of the coun­
are no more responsible for them than for try’s economic history, showing how
the circumstances of their birth. So the politics and the economy have interacted
state should ameliorate genetic inequal­ since the Industrial Revolution. “Impres­
ities as much as those of upbringing. A sively researched, succinctly written and
clear case on a complex subject. highly readable”, said the Times.

Water: A Biography. By Giulio Boccaletti. The Aristocracy of Talent. By Adrian

Pantheon; 400 pages; $30 and £22.50 Wooldridge. Skyhorse; 504 pages; $24.99.
Water moves and, until about 10,000 years Allen Lane; £25
ago, people moved with it—following the A history of the rise of the meritocratic
green flush of rainy­season growth and idea, its tendency to harden into aristoc­
grazing herds. Then came agriculture, racy and the current revolt against it, by
irrigation, ever­expanding settlements— our departing Bagehot columnist. The
and a need for rules and institutions to Times Literary Supplement called it “ex­
manage water resources. Humankind’s traordinary and irresistible…unfailingly
intensely political relationship with water entertaining, effortlessly drawing on a
is the undergirding of civilisation, argues wealth of anecdote and statistics”.
this rich and engaging history. n

012
 80
Economic & financial indicators The Economist December 11th 2021

Economic data

Gross domestic product Consumer prices Unemployment Current-account Budget Interest rates Currency units
% change on year ago % change on year ago rate balance balance 10-yr gov't bonds change on per $ % change
latest quarter* 2021† latest 2021† % % of GDP, 2021† % of GDP, 2021† latest,% year ago, bp Dec 8th on year ago
United States 4.9 Q3 2.1 5.5 6.2 Oct 4.4 4.2 Nov -3.4 -12.4 1.5 60.0 -
China 4.9 Q3 0.8 7.9 2.3 Nov 0.8 4.9 Oct‡§ 2.8 -4.9 2.7 §§ -40.0 6.35 2.8
Japan 1.2 Q3 -3.6 2.1 0.1 Oct -0.2 2.7 Oct 3.3 -8.9 nil -8.0 114 -8.6
Britain 6.6 Q3 5.1 6.7 4.2 Oct 2.4 4.3 Aug†† -2.9 -10.9 0.8 34.0 0.76 -1.3
Canada 4.0 Q3 5.4 5.0 4.7 Oct 3.2 6.0 Nov 0.8 -9.5 1.6 85.0 1.27 0.8
Euro area 3.9 Q3 9.1 5.0 4.9 Nov 2.3 7.3 Oct 3.3 -7.3 -0.3 29.0 0.88 -5.7
Austria 5.7 Q3 14.6 4.7 4.3 Nov 2.7 5.8 Oct 2.0 -5.8 -0.1 39.0 0.88 -5.7
Belgium 4.9 Q3 8.4 5.2 5.6 Nov 2.8 6.3 Oct 1.7 -6.6 nil 35.0 0.88 -5.7
France 3.3 Q3 12.6 6.7 2.8 Nov 2.1 7.6 Oct -1.3 -8.9 nil 28.0 0.88 -5.7
Germany 2.6 Q3 6.9 2.7 5.2 Nov 3.0 3.3 Oct 6.5 -6.2 -0.3 29.0 0.88 -5.7
Greece 13.7 Q3 11.3 6.5 3.4 Oct 0.1 12.9 Oct -4.4 -9.6 1.4 73.0 0.88 -
Italy 3.9 Q3 11.0 6.3 3.8 Nov 1.9 9.4 Oct 3.8 -9.6 1.0 49.0 0.88 -
Netherlands 5.0 Q3 8.0 3.7 5.2 Nov 2.3 2.9 Oct 8.5 -5.2 -0.3 21.0 0.88 -
Spain 2.7 Q3 8.3 4.4 5.6 Nov 2.7 14.5 Oct 1.1 -8.4 0.4 31.0 0.88 -
Czech Republic 2.8 Q3 6.1 3.0 5.8 Oct 3.8 2.6 Oct‡ 3.2 -8.3 2.4 112 22.5 -
Denmark 3.6 Q3 3.5 3.2 3.0 Oct 1.7 3.1 Oct 7.5 -0.3 nil 45.0 6.56 -
Norway 5.1 Q3 16.1 4.0 3.5 Oct 3.3 3.6 Sep‡‡ 12.5 0.4 1.4 76.0 8.90 -1.5
Poland 5.5 Q3 9.5 5.1 7.7 Nov 4.9 5.4 Nov§ 1.1 -5.8 3.1 176 4.07 -9.6
Russia 4.3 Q3 na 4.2 8.4 Nov 6.7 4.3 Oct§ 5.3 -0.5 8.6 248 73.7 -0.5
Sweden 4.5 Q3 8.2 4.1 2.8 Oct 2.2 7.6 Oct§ 4.9 -1.9 0.1 9.0 9.05 -6.3
Switzerland 4.1 Q3 6.8 3.6 1.5 Nov 0.5 2.5 Nov 5.4 -3.8 -0.3 22.0 0.92 3
Turkey 7.4 Q3 na 8.0 21.3 Nov 18.1 11.1 Sep§ -2.8 -3.1 20.5 765 13.7 0
Australia 3.9 Q3 -7.5 3.8 3.0 Q3 2.7 5.2 Oct 4.1 -5.8 1.6 60.0 1.40 6
Hong Kong 5.4 Q3 0.5 6.5 1.8 Oct 1.6 4.3 Oct‡‡ 4.0 -4.6 1.5 79.0 7.80 6
India 8.4 Q3 54.1 9.2 4.5 Oct 5.0 7.0 Nov -0.8 -7.0 6.3 41.0 75.5 5
Indonesia 3.5 Q3 na 3.1 1.7 Nov 1.7 6.5 Q3§ -0.1 -6.0 6.3 14.0 14,358 7
Malaysia -4.5 Q3 na 3.8 2.9 Oct 2.4 4.3 Oct§ 2.7 -6.0 3.5 79.0 4.22 -3.5
Pakistan 4.7 2021** na 3.8 11.5 Nov 9.2 6.9 2019 -4.5 -6.9 11.9 ††† 199 177 -9.7
Philippines 7.1 Q3 16.1 4.8 4.2 Nov 4.5 7.4 Q4§ -1.9 -7.5 5.0 185 50.4 -4.6
Singapore 7.1 Q3 5.2 6.1 3.2 Oct 1.9 2.6 Q3 18.1 -4.2 1.7 78.0 1.36 -1.5
South Korea 4.0 Q3 1.3 4.1 3.7 Nov 2.2 2.8 Oct§ 4.6 -4.4 2.2 55.0 1,176 -7.7
Taiwan 3.7 Q3 1.1 5.7 2.8 Nov 2.0 3.8 Oct 15.1 -1.2 0.6 26.0 27.7 1.8
Thailand -0.3 Q3 -4.2 1.4 2.7 Nov 1.0 1.5 Dec§ -1.4 -7.8 1.7 50.0 33.5 -10.3
Argentina 17.9 Q2 -5.5 8.7 52.1 Oct 48.3 9.6 Q2§ 1.7 -4.6 na na 101 -19.5
Brazil 4.0 Q3 -0.4 5.0 10.7 Oct 8.2 12.6 Sep§‡‡ 0.5 -6.1 10.8 339 5.55 -8.7
Chile 17.2 Q3 21.0 11.0 6.7 Nov 4.3 8.1 Oct§‡‡ -1.8 -7.1 5.6 268 840 -11.4
Colombia 12.9 Q3 24.9 9.8 5.3 Nov 3.4 11.8 Oct§ -5.3 -8.5 8.0 305 3,903 -10.5
Mexico 4.5 Q3 -1.7 6.1 6.2 Oct 5.6 3.9 Oct 1.7 -3.3 7.4 200 20.9 -5.6
Peru 11.4 Q3 15.0 13.2 5.7 Nov 4.0 8.6 Oct§ -2.6 -4.4 6.0 208 4.08 -11.8
Egypt 7.7 Q2 na 3.3 6.3 Oct 5.7 7.5 Q3§ -4.3 -8.0 na na 15.7 -0.2
Israel 4.1 Q3 2.4 6.1 2.3 Oct 1.6 5.0 Oct 5.1 -5.5 1.0 12.0 3.10 5.2
Saudi Arabia -4.1 2020 na 2.9 0.8 Oct 3.1 6.6 Q2 4.6 -2.0 na na 3.75 nil
South Africa 2.9 Q3 -5.8 4.9 5.1 Oct 4.4 34.9 Q3§ 2.8 -8.0 9.5 58.0 15.7 -4.5
Source: Haver Analytics. *% change on previous quarter, annual rate. †The Economist Intelligence Unit estimate/forecast. §Not seasonally adjusted. ‡New series. **Year ending June. ††Latest 3 months. ‡‡3-month moving
average. §§5-year yield. †††Dollar-denominated bonds.

Markets Commodities
% change on: % change on:
Index one Dec 31st index one Dec 31st
The Economist commodity-price index % change on
In local currency Dec 8th week 2020 Dec 8th week 2020 2015=100 Nov 30th Dec 7th* month year
United States S&P 500 4,701.2 4.2 25.2 Pakistan KSE 43,846.9 -3.4 0.2 Dollar Index
United States NAScomp 15,787.0 3.5 22.5 Singapore STI 3,129.8 1.0 10.1 All Items 150.9 155.7 6.7 8.7
China Shanghai Comp 3,637.6 1.7 4.7 South Korea KOSPI 3,001.8 3.5 4.5 Food 132.3 136.1 3.9 24.3
China Shenzhen Comp 2,521.3 -0.1 8.2 Taiwan TWI 17,832.4 1.4 21.0 Industrials
Japan Nikkei 225 28,860.6 3.3 5.2 Thailand SET 1,618.4 1.7 11.7 All 168.2 173.9 8.8 -0.5
Japan Topix 2,002.2 3.4 10.9 Argentina MERV 89,242.8 4.8 74.2 Non-food agriculturals 150.9 153.8 6.8 31.0
Britain FTSE 100 7,337.1 2.3 13.6 Brazil BVSP 108,095.5 7.3 -9.2 Metals 173.3 179.9 9.3 -6.2
Canada S&P TSX 21,077.4 3.0 20.9 Mexico IPC 51,056.3 2.1 15.9
Sterling Index
Euro area EURO STOXX 50 4,233.1 1.3 19.2 Egypt EGX 30 11,451.1 0.3 5.6
All items 174.0 179.5 9.2 9.7
France CAC 40 7,014.6 1.9 26.4 Israel TA-125 1,996.4 0.8 27.3
Germany DAX* 15,687.1 1.4 14.3 Saudi Arabia Tadawul 10,991.8 1.3 26.5 Euro Index
Italy FTSE/MIB 26,751.9 1.4 20.3 South Africa JSE AS 72,403.9 1.7 21.9 All items 148.6 153.5 9.9 17.0
Netherlands AEX 797.7 0.9 27.7 World, dev'd MSCI 3,196.4 3.5 18.8 Gold
Spain IBEX 35 8,478.4 0.3 5.0 Emerging markets MSCI 1,241.0 1.2 -3.9 $ per oz 1,780.1 1,783.1 -2.2 -4.5
Poland WIG 68,729.6 0.3 20.5
Brent
Russia RTS, $ terms 1,612.7 -4.4 16.2
$ per barrel 73.3 75.5 -11.1 54.0
Switzerland SMI 12,597.4 2.7 17.7 US corporate bonds, spread over Treasuries
Turkey BIST 2,004.6 7.9 35.7 Sources: Bloomberg; CME Group; Cotlook; Refinitiv Datastream;
Dec 31st
Fastmarkets; FT; ICCO; ICO; ISO; Live Rice Index; LME; NZ Wool
Australia All Ord. 7,707.2 2.0 12.5 Basis points latest 2020
Services; Thompson Lloyd & Ewart; Urner Barry; WSJ. *Provisional.
Hong Kong Hang Seng 23,996.9 1.4 -11.9 Investment grade 119 136
India BSE 58,649.7 1.7 22.8 High-yield 341 429
Indonesia IDX 6,603.8 1.5 10.4 Sources: Refinitiv Datastream; Standard & Poor's Global Fixed Income For more countries and additional data, visit
Malaysia KLSE 1,494.0 -0.2 -8.2 Research. *Total return index. Economist.com/indicators

012
 Graphic detail The Omicron variant The Economist December 11th 2021 81

Mixed signals → Omicron is spreading much faster in South Africa than prior variants did

New confirmed cases, seven-day moving average

Gauteng province (Johannesburg and Pretoria)
12,500
Delta
May-Aug 2021 10,000
Early data on Omicron show surging
7,500
cases but milder disease
Omicron First wave
May-Aug 2020 5,000
T wo weeks after the Omicron variant
was identified, hospitals are bracing for
a covid­19 tsunami. In South Africa, where
Beta
Nov 2020-Feb 2021 2,500
it has displaced Delta, cases are rising fast­
er than in earlier waves. Each person with 0
Omicron may infect 3­3.5 others. Delta’s 0 20 40 60 80 100 120 140
most recent rate in the country was 0.8. Days from start of wave*
South Africa is not in lockdown, which
may partly explain Omicron’s rapid spread.
However, prior variants benefited from en­ → Its advantage is at least partly due to escaping previous immunity
countering lots of people with no immuni­
ty. By now, most South Africans have either How infectiousness and immune escape affect spread
recovered from covid or been vaccinated. In population with 90% immunity to original strain of virus
In such an environment, there are two
ways Omicron could spread so fast. One is New infections 1.0 1.8 2.6 3.4 4.2 5.0 5.8 Share of immune population
greater infectiousness, which depends on caused per case vulnerable to reinfection, %
100
such factors as how easily it enters cells.
The other is better evasion of immunity.
The Delta variant became dominant 80
mainly because of its transmissibility. In
contrast, Omicron seems to have advantag­ Plausible values
60
es in both areas. Anecdotal evidence for its for Omicron
greater contagiousness is mounting: su­
per­spreader events after which 35­78% of 40
people tested positive have occurred in
Norway, Denmark, Spain and Britain. ↗ Cases rising 20
Delta in South
Moreover, Omicron has unprecedented
↙ Cases falling Africa, Nov 2021
capacity for reinfection. A recent study led
0
by Juliet Pulliam of Stellenbosch Universi­
3 4 5 6 7 8 9
ty showed that the number of South Afri­
New infections caused per case in population with no immunity
cans who test positive at least 90 days after
their last positive test is more than you
would expect based on earlier waves. And Reinfections† per day, first two weeks of wave, Gauteng
antibodies generated by Pfizer’s vaccine 0 20 40 60 80 100 120
are less effective against Omicron than
against earlier variants. However, they still Delta wave‡ 95% confidence
achieved solid neutralisation in people
Omicron wave§
with booster jabs or prior infections. Cur­
rent vaccines may offer good protection Expected, based on earlier reinfection rates Actual
against severe disease caused by Omicron.
Data on virulence are more heartening.
In hospitals Omicron has not yet shown a → Disease severity for hospitalised Omicron patients may not rise with age
pattern of worse disease in older people.
Among covid­positive hospital patients in Share of covid-positive hospital patients whose cases were severe, %
the South African city of Tshwane, 70% of City of Tshwane, Gauteng
those aged 50­69 and 90% of over­80s had 100
severe cases during the Delta wave. This
75
share is now around 30% for all ages.
The average severity of Omicron cases Delta‡
50
could rise. If it does not, one possible rea­
Omicron§
son is that Omicron’s mutations yield mil­
25
der illness. This would partly offset the im­
pact of a surge in cases, though death rates 0
could yet rise if wards are overwhelmed.
0-4 5-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80+
Another explanation is that many older Age group
South Africans got jabs in recent months. If
*Defined as cases rising for eight consecutive days †Positive test at least 90 days after most recent prior positive test
this is the cause, Omicron would pose a se­ ‡9-22 May 2021 §14-27 November 2021 Sources: NICD, South Africa; Trevor Bedford; “Increased risk of SARS-CoV-2
rious threat to the unvaccinated. n reinfection associated with emergence of the Omicron variant in South Africa”, by J.R.C. Pulliam et al. (working paper)

012
 82
Obituary Bob Dole The Economist December 11th 2021

the quid pro quos for the long line of lobbyists who came to his
door. Pen in hand, he would ask them in—with an accommodat­
ing smile for the agribusinesses that grew like Topsy all over the
Sunflower State.
The role of dealmaker was ideal for him. His three years of re­
cuperation in an army hospital had taught him infinite patience.
He could wait for weeks, tanning himself on the balcony outside
his office, sipping chocolate milkshakes in the Senate Dining
Room, until the time was right to make a move. Then someone
would give way, and the deal was struck. Since he could not take
notes he listened intently, his face settling into that dark scowl
that earned him the nicknames Mr Grumpy and Mr Gridlock. Yet
he also cut deals with Democrats—on Social Security, food stamps
and the law he took most pride in, the Americans with Disabilities
Act. His energetic campaigns for veterans united everyone. He of­
ten broke the tension, too, with one of his zinger jokes. And
though he mocked President Jimmy Carter as “chicken­fried Mc­
Govern”, he even came to respect McGovern, after a while.
Three times he ran for president himself, and three times
failed. (The closest attempt was in 1996, against Bill Clinton. Twice
he did not get as far as nomination.) The question that dogged him
was what his vision was. He couldn’t say, and wouldn’t be scripted
either. When some fool asked him what single thing people
should know about him, he replied “Beats me.” He just hoped to
serve the country. If the media didn’t like one vision, he told them,
he could easily find another in his vision­of­the­month club. That
joke didn’t go down too well.
He was plainly conservative, a foreign­policy hawk who dis­
liked labour laws, environmental protection, over­regulation and
extravagant social services. But he had mostly become a Republi­
can because he was a doer, and without being red you could do
nothing in Kansas. Certainly he was no radical. Supply­side eco­
nomics, with its tax cuts for the rich, struck him as garbage. (The
Climbing that hill good news he’d heard was that a busload of supply­siders went ov­
er a cliff, and everyone was killed. The bad news was that two seats
were empty.) The guiding principle of his politics was that govern­
ments should not run deficits. For years he refused to sign a no­
tax­increase pledge, until it was clear that his party would not back
him unless he did.
Bob Dole, Republican leader and quintessential Kansan,
He had not learned such parsimony in Washington. He had
died on December 5th, aged 98
learned it in Kansas in the 1930s, when dust­clouds turned the sky

W henever he stepped out in public or entertained in private,

Bob Dole carried a pen in his right hand. Always a black felt­
tip. It looked purposeful, as if he meant to take notes. In fact, it was
dark­brown round his tiny town of Russell, in the Plains. The
farms disappeared that fed the creamery where his father worked,
and his mother had to sell sewing machines door­to­door. As for
to stop well­wishers trying to shake his hand. Every day he went him, he became a soda jerk in Dawson’s drugstore, and could flip a
through the ritual of pushing the pen between his right thumb and scoop of ice cream up to the ceiling to catch it in a glass. That was
forefinger, then folding the other fingers round the shaft. All with before the war came, and Hill 913.
his left hand, which just about worked. His right hand and arm Russell was the real vision he carried in his head. This was an
could do nothing at all. Not after that day in Italy in 1945 when, as a America that was not some myth from a golden past. He had
young lieutenant, he had been told to take Hill 913 and German fire known it personally. The virtues prized there were honesty, fru­
had smashed his shoulder away. gality, faith and, above all, dogged perseverance. He trusted in the
For some time he was completely paralysed. Over months and hard way. The reason he became Richard Nixon’s hatchet man dur­
years he worked and worked until the dead arm was his only visi­ ing Watergate, fighting off his attackers, was not just because he
ble handicap. Yet this meant he could not lace up shoes, cut up his considered the president a mentor and a friend. It was because
food, put in eye drops or button a jacket. It was hard to turn pages, Nixon, though hardly honest, was a poor grocer’s son who had ris­
and impossible to hold both a mike and a script. Frustration en through sheer determination. At the president’s funeral he pic­
sharpened the edge of his dry, terse Kansan tongue. That could tured him as a boy lying in bed, listening to the whistle of night
lead to political suicide, as when in a tv debate in 1976 he called all trains bound for distant places. That image seemed to apply more
the conflicts of the 20th century “Democrat wars”. He truly went to Russell than to Yorba Linda, California.
for the jugular then, and it was his own. In 1996 he went back home to celebrate gaining the nomina­
His injuries, though, also propelled him towards becoming at tion. It was half a century since he had thumped face­down in the
many points the most powerful Republican in the land. Since he dirt, trying to spit the blood out of his mouth, and found he could
didn’t want to end up on the street selling pencils, he started read­ feel nothing below his neck. At the old house on Maple Street the
ing. That got him into law school, then into politics. For 35 years pulley­and­weights contraption his father had built, to help him
from 1961 he served in Congress, 27 of them in the Zoo, as he called strengthen his arms, was still on the wall of the garage.
the Senate, and 11 of those as ranking Republican leader. He was al­ In his right hand, too, he still clutched his pen. Black felt­tip,
so chairman of the Finance Committee, the guy who could arrange with slight toothmarks. He wanted it buried with him. n

012
 Audrey Tang Ma Jun Ai Weiwei
Democracy and technology China and climate change Art and capitalism
Francis Fukuyama Ugur Sahin & Ozlem Tureci Cyril Ramaphosa
America’s purpose What’s next for mrna Ending vaccine apartheid

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